Hi!
I was just at Clouds Rest on 7/19.
7 hours should be more than enough time for you to complete the hike. It's long, but the elevation gain is only something like 2000ft, so there are a lot of flat stretches.
Be sure to start early if there are forecasted afternoon thunderstorms. There are a ton of mosquitoes in the early morning, so be prepared for that!
I would carry a couple of liters of water to be safe. I wasn't paying close attention, but I think all that was left of the first few creeks was stagnant water. The last water source on the trail is a small stream/creek (around 0.5 mile past the lake/pond shown in the first picture). It was flowing well a couple weeks ago, but I don't know the current condition.
In terms of the fire...I was at Yosemite again on 8/2, and the smoke was pretty disgusting in the early morning (around 6am in the valley). It's not so bad if you're just at rest, but the smoke really irritated my lungs since I was breathing heavily during sustained exercise (hiking uphill quickly). Looking down into the valley, it looked like a big bowl of smoke. The air quality got MUCH better later on in the day, although the views were still hazy. Clouds Rests is farther from the fire than Yosemite Valley, and it's higher in elevation, so I think the air quality will be better there.
Have fun on your hike!
