The thing with having this all powerful pantheon in game that does nothing is that it will bring into question how important our quest is.
This is what is so confusing. You keep calling the Seven all-powerful. They are gods. They could smite you, just like Kasyrra could smite you. Just like Sigrune could smite you on all but their worst day or you save-scumming and reloading for them to roll a Natural 1 on their attack roll. They are like King Kong, a god to a people because they are beyond the cares and being affected by all but the most impactful actions. A god that fights back other monsters and creatures that kill with little concern, but they don't ask why King Kong doesn't stop the storm around the island, or why he doesn't teach them to make really sharp spears to kill the giant dinosaurs so they can do it themselves or why he doesn't kill all the mosquitos biting them with a mighty clap of their hands. Yes, Kasyrra is a threat, but she isn't necessarily going around killing masses of people. Even the imp spawn are mostly just beating people up to bang them unless they're attacked themselves. Some people getting corrupted, so they are concerned, but they're also fighting back incursions from Wraiths and worse creatures beyond Savarra that will kill with no conscience.
Different gods do different things. Sorra might be able to stop a storm, but complaining Mallach isn't a god because he doesn't do it or calling Keros uncaring because he doesn't make all the crop yields for every farmer into a bountiful harvest no matter how lazy or inept they were doesn't prove they're stupid. In fact, Keros is more likely to blight the crops of lazy or inept followers (to teach a lesson, not to be a dick).
They aren't all powerful, I don't know where you get this concept. CoC 1 and CoC 2 are very clear that gods can be driven off, killed, and even consumed or trapped. You're calling CoC 1 better thought-out for going one route (the gods were defeated by a demon), but conveniently ignoring that aspect for a location that does have gods (where they can be defeated by a demon). Maybe the Seven are smarter than Mareth's gods, who probably proudly and vainly thought they could just swat a threat without trusting in their followers or their Champions. That doesn't make them stupid or uncaring. It is fine for a character in the game to think gods are immensely powerful, but you don't pray to Tira for a good wind to sail upon and you don't call on Mallach to summon the creatures of the forest to aid you.
If they are so capable of killing Kas with just a poof of their farts, it does make the in game conflict feel artificial.
Who is telling you this? Some NPC in game? NPCs can have mistaken points-of-view. But actual fact from game history shows that gods can die. It's written in the conflict of the elven schism where the Wyld Trees are waning, it's written in Mareth's past, it's probably occurred in Savarra... where some gods just... left or maybe never existed at all or died out. It is shown in actual gameplay, where trying to save you leads to Lumia sacrificing herself and getting killed when you fail to defeat a Wraith and leads to a bad end. Just because it isn't a canon ending doesn't mean it isn't shown to be possible. Lumia could have probably gone on decades more fighting the creature or keeping it contained, but when the Champ arrives and she decides to help, the outcome is very possible that she dies horribly because you fail and she tries to save you (she does, but you ultimately become a servant of the Wraith entity).
You're claiming that the gods have to step in and help you and everyone else with every problem, otherwise it isn't a real problem or quest. That's like saying, "
Because the gods didn't come down and smite my mate's killer, it's clearly not important for anyone to bring him to justice. I shouldn't even try and find them."
or
"
Oh, a god didn't send a swarm of Valkyries or show up herself to clear my ancestral home of Dracia from occupation? I guess my quest and dream of seeing it free is all artificial! No need to hunt down the demon-queen that foolishly allied with Kasyrra to have an heir and squandered the city treasury and lead to the death of almost all nobles in the city! Surely an all-powerful god could hunt down Alissa for me and defeat her. And bring her back unharmed... and put her on trial... and probably serve as prosecutor for the case... since the original one was a noble and died. And then take her to a jail and make some divine cell to hold her... and be in charge of her incarceration... and probably work to reform and redeem her... So I shouldn't even bother! Maybe I can fuck her in the cell afterwards though as a reward for all my... complaining about how long it took."
More so then Kas simply letting us roam free did.
That makes perfect sense. She's ultimately a scientist or researcher or enchanter and inventor. She senses the power and potential in your soul. That's why she doesn't outright kill you. She needs you (or your soul specifically) to grow in experience and power. You can't do that in a cage or sexual slavery. She needs you to go out and face challenges (obviously she doesn't want your quest to be to stop her goals, or at least not be successful). She doesn't care if you crush Tollus and his cult. She gives you the Waystone Amulet because she knows traveling the Ways will empower you and subtly change you. She wants you strong so you can help her and be her partner. There's plenty of bad ends (again, not canon as the actual outcome, but that doesn't mean they aren't true in what they reveal) where Kasyrra takes over the world and defeats the gods and has all their power, but it isn't what she wanted. "
It wasn't supposed to be this way."
So she clearly
can beat the Seven (we don't know the method, maybe with more portals, more dragon daughters getting brought through, Tollus working under the radar because the Seven focus on Kasyrra instead of him subverting everyone in their cities, or finding enough old magical artifacts). The gods need to rely on their Champions (even making the Champ one of them) and the people of Savarra working together. And they are gathering support, just in their lands and powerbases. The Champ is doing it in the Marches and Lumia is helping the Champ in there. She was just distracted with an immensely powerful Wraith draining her powers until very recently.