So strange

RE7 was made on the "RE" engine that was new by that date, so the tools and structures knowledges that modders had about the previous "MT Framework" engine had not use on RE7, that made the modding harder (much more time consuming and technical knowledge demanding) so starting to mod it is null or slow (as it happens with most of the games in the market).

It requires someone with technical knowledge
With experience
With free time
And with a huge motivation, maybe encouraged by a big modding comunity (which RE7 hasn't), or by a deep love for the game ( However RE7 failed to grow in many RE4-RE6 players and their modders who had experience and tech minded).

Now there are more RE engine games that are catching more modding attention, (making data discoveries and such) I think it's fact of time that the new tools they do for those other games, were one day able to be used also in RE7, and maybe then there were more mods for that game done by the RE7 fans (who are the ones that should put the effort and work in that happens, not just lament because fans of other games are not making mods for this one, modding is free and optional, never a obligation).

I might be mistaken but isn't model swapping in RE7 similar to REmake 2?

I have no idea how to mod but I'm just judging from the fact that they're the same engine, I thought it'd be possible by now.

Your idea is really good. Might I suggest Candyman for Mama Baker? After all, Candyman also controls flying insects Or which famous horror movie villain carries a lantern around?

I was always under the impression that RE7 just wasn't worth modding as much as other Resident Evils because there was so little in the game that people would like to play around with for modding purposes.
Plus the fact that the game didn't offer much replayability didn't help either.

RE4 through 6, the Rev games and the REmakes offer far more replayability and fun therefor game modders get more motivation to create even more replayability because they liked playing them so much just like normal players, we want more just like them.

Costumes and re skins are the most well known Resident Evil mods and RE7 didn't have much reason for modders to mod in new costumes or reskins because none of the characters were worth the effort, nor did they show up enough for the mods to be appreciated.
Even if someone managed to grind all the coding to make a mod that replaced RE7 Chris with RE5/6 Chris in Not a Hero, would anyone really wanna bother playing through again? Not much point since you can't see Chris outside of cutscenes anyway.

And lets not deny the infamous motivation for mods that female characters in third person action games give modders, you just need to look at Claire's REmake 2 mods for that.
I always believed that's why in DMC5 Trish, Lady and Nico didn't get as much attention as they were pretty much just limited to cutscenes while the 3 leading men were getting cool costumes, music mods and weapon mods, even the inevitable nude mods for the ladies were just a textured version of the nude models that were already in the game and they don't look very good compared to REmake 2's Claire and Ada who had multiple variations of nude mods from many different authors.

RE7 just didn't have anything, REmake 2 had plenty and REmake 3 will likely have MUCH more.

There's still plenty more that could be done other than skins and model swaps for Ethan. Like the OP mentioned, replacing the Molded with zombies would be awesome or DarkSamus' request would be nice as well.

The weapon models could be swapped, like swapping the ugly ass .44 Mag with a Lightning Hawk or something. UI mods, like making the inventory look more classic. Music mods, like replacing the Save Room music with Save Room music from other RE games.

There's always plenty of things to mod on any game