Is your 7-year-old able & willing to do all the care & maintence an indoor caged rooster will require? Are you sure that he will remain gentle & mannerly as he grows, alone & caged, so he will continue to be suitable as a pet for a young child?
I'd say re-home the rooster, get your daughter interested & involved in caring for the hens you have, and begin to feel out the possibility of getting approval from your community for keeping them.
You're taking a big risk by keeping a caged rooster. Your immediate neighbors may not mind but a rooster's crow carries a long distance, you risk irritating someone in your neighborhood who would complain. And since it's not the ideal living condition for a rooster, you risk altering his temperment so he could be more aggressive, & more easily irritated.
I don't think it's worth it just to keep the roo for breeding. Fertile eggs are easy to obtain either locally or through the mail, for whenever you're ready to incubate. Of course then you'll have to consider what you're going to do with any & all the rooster chicks you hatch out at home.
It's always a good idea to have a Plan B for any unwanted roosters, no matter where or how you obtain your chicks, before you get emotionally attatched to them.