Great job, it sounds like you have really got the idea of scale intervals right.
The dominant 7th scale can work over the 1-6-2-5 progression, but when used over the progression I notated there in it’s classic form we will get a few jazzier notes, especially the b7 itself.
You are now nearing the world of jazz, where certain scales are used over certain areas or a chord progression, and ‘rules’ in harmony are broken. For example, you can make all those chord in the 1-6-2-5 progression dominant 7th chords and it will bring a whole new character, more suited to a blues scale.
In short the major scale over that progression will sound the sweetest. The dominant 7th scale a little ‘jazzy’.
When I talk about using a diatonic harmonica in the key of G, you have the choice now of using either a G harmonica in first position, or a C harmonica in second position. That is with the knowledge and techniques taught on the course to this point.
Hope that clears it up! 🙂