The nurse that you saw probably has not read a medical journal in the last 20 years! It used to be believed that bf babies lacked iron, as bm is low in iron. But we know now that bf babies have much better iron levels as nearly all the iron in bm is absorbed, whereas only a very small amount of iron in food and formula is absorbed (which is why there needs to be so much in there!). Many people are surprised to learn that around 95% of iron in bm is absorbed, whereas less than 5% of the iron in iron fortified baby cereals is absorbed. Sadly some people are still advised to give babies cereal to keep their iron levels up, and in fact it has the opposite effect if the bm intake drops as a result.
Tanya, just in case you missed MR's post earlier - re iron levels.

If your DD has not had a blood test to determine her iron levels then the MHCN really has no basis on which to claim she has low iron levels. Remember too, that while dropping in the percentiles can be an indication something is wrong, there is also the fact that at birth her weight is determined by the function of your placenta (you obviously cooked her well!) and by now genetics have taken over. So if she is a slim slight child and takes after you or your DH, she is unlikely to have remained on the 97th percentile! If she has dropped gradually over time then I would say the latter is the case.

At 7 mths there is no way I would be cutting back bfs to introduce more solids, bm is still nutritionally the best thing for her at this age. If you take out bm for the sake of 'eating' more solids you could be doing the wrong thing. It may be something to worry about if she was 14 mths, but not 7!