Past perfect isn't necessary because the events are stated in the order in which they occurred.

Yes, the action was completed before he proposed. However, the word "before" establishes that all by itself. You CAN say “They had gone out together for seven months before he proposed". That would be correct but it feels repetitious because there is no need to emphasize the completed action by saying both "before" and "had gone". You could also say "They had gone out together for seven months WHEN he proposed to her" because at that time they had the experience of going out for seven months. That would not be repetitious because "when" does not imply the action had been completed. Another possibility is "They had been going out together for seven months when..."