Hey Dave,

Most Christmas songs are written in G because the key
of G has a sort of warmth to it, the kinda of sense you
would want in a Christmas song. Also alot of Ballads are
written in G for the same reason. Now why the D7 is in
those songs alot is because it is the Dominant chord in the
key of G. Which no matter what key your in or what kind
of song your playing, Dominant Seventh's are found everywhere.

Josh and Dave,

Here's something that might help you understand it. Moods
and feeling we get from certain sounds doesn't really come from
the Chord, it's the individual notes in the chord. See the D7 is
happy sounding because of the D, F#, A, and C# in the chord.
A is a very bright tone, the F# and C# are both rather strong,
so when they come together it's a sense a happiness you might
get. Now if you play a B7 chord, it's not very happy because
that chord is made up of B, D#, F#, and A#. B is a dark sound, so
is A#. The D# is more mellow, mixed with the stronger F#. So the
feeling you get is a strong but darker sound.

The sense of a Seventh Chord is the 7th, like in D7, it is the
C#. This is because the D and C#, in pitch, are so close that
they clash. That is the sound of the Seventh chord, it's the
clashing of those 2 notes. In Result, it will give a sense of
strenght.

Same thing with a Sixth chord, which tends to be Harmonious. Take
a Dmaj6 chord, it is the B that gives it the harmonious sound.
Because the B is a harmonic third from D. B and D do not clash,
they go together like D and F#, harmonically it is a major sound.

Hope that helps.