Don’t worry about it, just tell him the truth in words he can understand. Children aren’t in the least scared by this sort of thing. In fact by and large children that young aren’t scared by *anything *that doesn’t directly apply to them.
To a child of that age, an event that happened to someone he has never met, in another town, 5 years before he was born, simply isn’t ‘real’. He can learn theory from such stories, but to him the event occurred a long, long time ago in a country far, far away. It doesn’t apply to him any more than the events in a fairy story. The only way you will scare a child with that story is to either bring in graphic details, or to get upset yourself. An impassive explanation of the events will have much less effect on him than a scary fairy tale at bedtime.
Also, realise that unless you have been very careful in monitoring what he watches on TV, there’s even odds that he has seen people bound and gagged on Sunday morning cartoons. He won’t know those are words for it, but he will probably have seen characters tied up with something tied over their mouths so they can’t talk. And if he hasn’t he will within the next 12 months unless you rigorously censor his TV viewing both at home and at friend’s places. Being bound and gagged is ubiquitous in children’s entertainment, both TV and literature.
So just tell him the truth if he asks. Being bound means the person had their hands and feet tied so they couldn’t escape, and being gagged means that they had cloth tied over their mouth so they couldn’t call for help. Being held hostage means that a bad guy keeps someone prisoner until their family or friends give him money to let them go. That’s not a perfect explanation of what a hostage is, but it’s close enough to the truth that a 7 year old will understand it without having to get into a discussion about threatening to kill hostages.
If you’re clever, you can use this as an opportunity to teach a bit of history, and explain how pirates and knights used to make money this way, by capturing people in wars and holding them hostage until they were paid a ransom. You also get the chance to introduce the word “ransom”.
People over-think this stuff way too much. Children will accept almost anything with nothing but a shrug if it doesn’t affect them. Tell him someone might break into the house while he is asleep, and he might be worried. Tell him that 10, 000 people were blown up in a volcano in the next state the year before he was born, and he won’t care in the slightest. The ability to empathise to any great degree with events that occurred long ago and far away or the ability to extend the risk of those events occurring here and now really don’t develop until about 12 years of age. Until then it’s damn hard to frighten a child for more than 5 minutes without telling them that it can happen to them personally.
Speaking from memory, the most frightening part of this sort of thing is caused by adults doing exactly what you did: making up a transparent excuse not to talk about it. A child knows that means something bad is happening, but he doesn’t know what. Imagination is much worse than any explanation that a sensible adult would give. “A man once tied up a woman until her family gave him money to let her go” would not register with even the most sensitive 7yos. They will understand it physically, but they lack both the experience and the empathy to understand the actual horror that a person in that situation feels. So they simply can’t be frightened by it.