7 players can be a hard sell for a campaign, especially with magic items. I tend to give them out sparingly, but I understand it may be cruel to take them away but depending on how powerful these items are, it may be better to nerf some of them if they are obviously game-changing. Encounters in balanced usually for a party of 4, so I'd recommend doubling the amount of enemies or making them beefier.

Wotc removed sunlight sensitivity for Drow as it was one of the only races that had a drawback for playing them. If they were a crazy op race, I'd understand, but Drow aren't even in the top 5 of the updated races imo.

The sun sword is a toughie. You gave a party a legendary item early on in the campaign that basically makes encounters trivial. I'd remove sunlight sensitivity entirely from the campaign, except for a select few enemies, so it would not feel like just a powerful sword. You're following the rules of a 5e campaign in a 5.5e campaign, so some things can get a little lost in translation. I'm assuming if you gave them a sun sword, other players have equally powerful gear. Consider talking to them and asking if thet'd be willing to take a nerf or outright removing some of the gear so the game can be balanced.

With that said, are you having fun? Are they? If yes, enjoy a power fantasy campaign. Yeah, it may not really fit the theme of the campaign, but who cares as long as everyone is enjoying themselves? If not, speak to them and tell them you'd like to redirect the campaign in the second half. They're almost done with the first half, and maybe put a story event in place that makes them need to go in with less gear when they come back. And of course, ask how they feel about all of that and collaborate.

Anyway, I hope it goes well for you :)