I maintain some archaic service hardware via VirtualBox (since its free like mentioned) with dare I say it....WinXP. Whatever it works fine and its lightning fast since its...well WinXP in 2017. Lol.
I never tried using its from an external storage device however I can't imagine it being too difficult. I wouldn't be worried about the VirtualBox software itself obviously, just the machine software.
So point the default directory to the external drive. Make it whatever size you need (Win7 + all the update software you'll need) and you should be golden. Add your guest additions once you get it fired up (Devices > Insert Guest Addition...) and you should have access to USB connected devices hopefully less painfully then with WinXP (drivers and such blah).
Partitioning and/or buying a new computer for something thats rather trivial seems like overkill if you can do it for free IMO.