Might as well call it zero grams. If 7 grams were subtracted from 696 mg you would have to round to zero. If you are answering this for a US public school math or science teacher who doesn't understand significant digits you should answer -0.004 mg.
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7 g = 7000 mg > 698 mg
No, 7 g is 2 mg. more than 698 mg.
none a milligram is less than a gram
No - 696/7 = 99.428571 recurring (that is, 99.428571428571...)
7 g = 700 mg and so is greater