I've apparently reached the first major obstacle for my project.
Turns out that GMPhysics isn't fully compatible with Gamemaker 7. There is a limit on the number of physics object you can have - too many and the game won't load. So I can get an 800x600 map working with about 30 static objects and 6 physics objects, but more than that and . . . error.
They no longer allow you to buy version 6.1.
No word on a newer version of GMPhysics anytime soon.
So I'm going to look for some other solution to getting the physics in my game.