Your natural instincts betray you. Megapixels in still cameras have ceased to have meaning many years ago. If you look at the actual sensor size, the 7xx has a larger one than the 5xx. reason would dictate it should produce images with higher pixel counts. But who says OEMs have to be reasonable.
I believe the main difference in these models is the sensor size. 7xx has a larger one. And also it looks like the 5xx series cannot take lens attachments or accessory attachments.
For your purpose today the 5xx will be suitable. However, for family events in say, a living room or kitchen, a wide angle lens is very much desired for me.
The new models have wifi which is probably not worth much unless you are trying to get yourself in the picture, or wearing your camera on your head as I do.