The chord's job decides its colour
A 7th is not just a 7th: the kind of 7th decides what the chord does. A dominant 7th (G7) is tense and pulls home. A major 7th (Cmaj7) is soft and settled. A minor 7th (Dm7) is smooth and leads on. Picking the colour that suits the chord's job is most of what reharmonising is.
Look up every chord and colour on the chord colours guide, and try them on your own song with the Reharmonise tool.
Frequently asked questions
Which 7th chord goes where?
Use a dominant 7th on V (G7 in C): it pulls home. Use a major 7th on I and IV (Cmaj7, Fmaj7): soft and settled. Use a minor 7th on ii, iii and vi (Dm7, Em7, Am7). These are the notes that already belong to the scale, so they sound natural.
Why does a major 7th on V sound wrong?
It is not wrong, just different. A major 7th on V (Gmaj7) loses the tense pull towards I that a dominant 7th has, so the chord stops acting as the tension chord. It can sound beautiful, a bit like a different home.
Why is a 9th on the iii chord a problem?
The 9th of Em is F♯, which is not in C major (the key has F, a half step away). It clashes with the melody and the other chords. Stay with the minor 7th on iii.
Is this a rule?
No. It is what usually sounds natural. If you like the sound of a chord somewhere, use it. The drill teaches what you are choosing.