Hello Dean (?), another K-7 user here. When you say Photoshop Express (PE) doesn't support PEF files but you
were able to edit them, then your version must support PEF files. Otherwise you'd get an error message from PE.
When you import a DNG file from the camera, PE applies some default processing to it and this has probably coincided with your JPG settings in the K-7. I use an old version of Photoshop with Adobe Camera RAW and the DNG files I imported from the camera had a default set of contrast, saturation, clarity etc applied to every single one of them. That wasn't what I really wanted, so I changed these defaults to
no change in contrast, saturation and
no clarity etc applied and this gives a very flat, dull starting point to begin processing from. This is a preset configuration which Adobe Camera RAW remembers.
If I want a "standard" result from the raw files, I make another preset configuration or maybe several for different circumstances: select the preset and the image(s) are automatically processed all the same. However, I very rarely do that!
Hope this helps.