What is the importance of Exodus 24:7? "All that the lord has said we will do and do obediently", but there has got to be more. Where were they? What were they doing? What happened after?
The covenant in the Old Testament is best understood as a Suzerain Covenant, a common type of covenant (read: contract) from the ancient near east. Such covenants, when written out, followed a typical format of about five points:
The book of Deuteronomy follows these five points quite closely. The Preamble introduces the suzerain and his vassals. The History recounts the past relationship between the suzerain and his vassals, frequently pointing out what the suzerain has done on behalf of his vassals. The Stipulations contains a series of commands the vassals are to obey. The Sanctions outlines the rewards for obedience, and the penalties for disobedience.
The fifth point, which I have termed the 'Closing' as a catch-all label, varies from source to source, but it typically involved a sacrificial meal that bound the suzerain and vassals together. It was, in effect, the ratification of the covenant.
(The book of Deuteronomy as a whole is modeled on the above five points.)
In Exodus 20-23: the suzerain God has made himself known to his vassals Israel (Preamble, 20.1-2a), he has rescued them from slavery in Egypt (History, 20.2b), he has given them the Law and has explained the corresponding rewards and penalties (Sanctions, 20.3-23.33).
The scene in Exodus 24 is the Closing, the ratification of the covenant between God and Israel. A sacrificial offering is readied (24.5-6), the people proclaim their intention to obey the covenant given to them by their suzerain (24.7), the blood is sprinkled on them to show that they have now been bound to their covenant with God (24.8, cf. Hebrews 9.15-22), and the selected leaders of the people go up (to heaven!) to have a communal meal with their new suzerain (24.9-11).
Meredith G. Kline writes it this way:
Kline. 'Dynastic Covenant'. http://www.meredithkline.com/klines-works/articles-and-essays/dynastic-covenant/
Perhaps the first thing is to attempt to establish authorship. Generally, Exodus chapters 1-24 are attributed to the Yahwist, or 'J Source', while chapter 25 is attributed to the Priestly Source ('P Source'). Some analyses say that chapter 24 could have been the work of the Elohist ('E Source'), but this seems unlikely (at least in respect of 24:1-11), as no one could look at God in the Elohist texts, and in 24:10-11 we see that a quite large group of people looked at God and even described what was under his feet. In either case, verse 24:7 must be ancient, probably originating quite early in the first millennium BCE.
The chapter continues with God speaking to Moses (Exodus 20:1ff). Then Moses told the people what God had said to him, and then went to offer a sacrifice to God. At this point (verse 24:7), he read the book of the covenant to the people, who respond by saying they will do as God commands. After this, Moses and Aaron, Nadab and Abihu and seventy of the elders went up and saw God in person. God told Moses to come up the mount and there God will give him a stone on which God had written a set of commandments.
Now, it is possible that 24:7 is a Priestly Source interpolation, because it breaks the flow of the story of the sacrifice, and because the theme of obedience to written laws is a particularly Priestly notion.