I agree that it would be worthwhile to try setting the lens' IS to Mode 2, the panning mode. Like others, I suspect the movement you see in the VF is IS related. Focus doesn't cause the image to jump around. IS does.
100-400 if used locked down on a tripod is one of those lenses that you need to turn off IS completely. Otherwise, the IS can actually induce movement, rather than counteract it. However I imagine with moving subjects this isn't the problem.
So long as you start IS and let it come up to speed (which takes a half second), the IS activity you see in the VF usually doesn't effect images in a negative way. Occasionally you might get a blurred image where IS was in mid-movement when the shutter tripped, but usually not.
Also... do you use Back Button Focusing
? You might want to give it a try. It's ideal for this type of photography (actually works well for most types... I very rarely use anything other than BBF now). Edit: I see Eric has mentioned this, too. BBF can be assigned to the AF On button... I swap the function of the AF On and * buttons, because the * button is bigger and closer to my thumb, and BBF is far more important to me than AE Lock.
Experiment with the AF tweaks available to you in the Custom Functions.
For example, for general purpose, yes it's often best to reduce AF sensitivity.... C.Fn III, 1... A lot of folks recommned to set it one or two notches toward "slow". This actually doesn't slow down tracking at all. It regulates how quickly the AF will jump to another subject when tracking... such as if another object comes between you and the subject. But actually, after using a pair of 7Ds for a couple years now, I tend to keep this set toward "fast"... opposite "common wisdom". I do this when using Single AF Point and there are few or no other targets to distract the AF system... and when the subject is moving somewhat erratically, can change directions fairly quickly. Here I set this faster. Set slow, the camera will continue to try to predict the subject on the previous course. Set fast, the camera will respond more promptly to the subject's change in direction. You might set it differently panning a single, fast moving motorcycle along a straight, as opposed to tracking one coming through a corner, or multiple motorcycles in a pack where you are trying to keep the focus on a particular one.
C.Fn III, 1 is also sort of user specific. If new to the camera and tracking/shooting fast moving subjects, but having some trouble keeping the AF point on the subject, slowing this down can help. If the user lets the AF point "slip" onto the background, for example, this setting can help prevent the lens from going heavily out of focus quickly. In time, with practice and learning to carefully concentrate on keeping the AF point where you want it, you may be able to set this C.Fn faster.
C.Fn III, 2: Autofocus/Drive AI Servo 1st/2nd Image Priority I generally leave at the default (0) setting.... AF Priority vs Tracking Priority. This setting allows you to prioritize drive speed and shutter release over AF and tracking, but I figure what's the point of having more images, if those images aren't in acceptible focus?
C.Fn III, 3: Autofocus/Driv SI Servo AF Tracking Method... I generally leave set to continuous (1). This really has more effect when using mulitple AF points, than single point (which is what I use most of the time).
C.Fn III, 4: Autofocus/Drive Lens When AF Impossible... is a bit tricky and depends upon the user and the lens being used. I usually leave set to default (0) which is "focus search on". The camera will refocus if for any reason tracking/lock is lost during an AI servo tracking session. Turn this off (1) and the user needs to restart AF (lifting pressure off the button, then reapplying it) to get the camera to retry. If using a USM lens with FTM (Full Time Manual) focus, where you can safely override AF manually without having to turn off AF, you might use this setting differently than with a non-FTM lens.
C.Fn III, 12: Autofocus/Drive Orientation Linked AF Point seems useful for slower moving subjects. It allows you to set up different focus modes and choose different AF points in portrait and landscape orientation.... However I do think it causes a slight delay while the camera is checking it's orientation and figuring out which to use. So I don't use it when "center point only" will do. Also, if setting this up you have to remember that there are two portrait modes... one with the grip at the top and the other with the grip at the bottom. So there are actually three orientations to set up. You actually can use different focus modes, too... such as Single Point for portrait orientation and Zone Focus for landscape... or any other combination.
Be sure you haven't accidentally selected Spot Focus when using Single Point. You probably already know that Spot Focus is the mode that uses a smaller sensor area... approx. half the size as usual. This mode is great, I love it for precision focus. But Canon specifically warns about using it with moving subjects and in lower light situations because it's slower and less responsive than the standard Single Point mode.
In AI Servo here is no focus confirmation or indication that the lens isn't achieving focus (there's no "lock", so nothing to indicate either way). It can be hard to tell in the viewfinder, if focus is being achieved. So you have to learn to trust the camera and your use of it.
A couple things that can help...
Setting C.Fn III, 9: Autofocus/Drive Display All AF Points to the default (0) Disable will use the active matrix in the viewfinder to only show the active AF point (no red flash, the way other cameras do).
Setting C.Fn III, 8: Autofocus/Drive VF display Illumination only effects the "red flash" of focus confirmation in One Shot. I don't think it effects anything in AI Servo.
You also might want to set Micro Focus Adjustment for that particular lens, if you haven't already done so. It's a bit hard to dial in MFA with a zoom... you might need to compromise across the range of the zoom... or you might need to select a commonly used focal length and adjust it for that particular FL.
Also remove any filter from the lens and use the lens hood. Both can effect AF speed and accuracy.
Finally, it might help to use a monopod or tripod with a gimbal mount, just in case you are actually seeing camera shake blur... And try stopping the lens down a little, both to increase it's sharpness and give more depth of field to cover any slight focus error.
And don't expect perfection.... no AF system is perfect. I get probably 95% or slightly better "acceptible focus" with 7D, after two years using them... and not leaving much of the decisions to the camera (All Points, Zone Focus and Expansion Points all let the camera decide where to focus).
All in all, 7D has quite a few focus customizing features... for different situations and for different users. Try some different settings that you feel might help, but just one at a time and take a bunch of shots with the new settings before deciding if it's working.