Relationship Q: What to do? :/

Good God. This is simple. Minimize your losses.

You said you love this girl you've been with for 7 (!) years, yet this girl from school (that you've been messing around with for 4 (!) years) is never out of your mind. Sounds like you have stronger feelings for the girl from school, and you simply have a greater level of familiarity with the girl from home. Don't mistake being comfortable with someone to being attached to someone. Comfortability is a result of a great deal of shared time or experience with someone. Interest/attachment/connection comes as a result of some intangible bond or draw you have towards a person. Sexual attraction comes from how interested you are in fucking someone. Don't get the three confused. They can and often do overlap, but they are not the same thing.

In this situation, talk to the 'newer' girl and explain the situation to your advantage. Explain that you've had an on-again-off-again thing with someone from home who've you known for years but you don't really share a special connection with. Paint it like it's always been the easy option, you go home for break and holidays and she's there and since you knew each other in high school and went to prom and shared a lot of friendly moments together, it's been an extended but harmless fling.

You've known this newer girl for years as well now, and you've grown increasingly convinced of your feelings for her. You're struck by her charisma, energy, and the similarities you share (regale her with the nitty-gritty stuff she'll be shocked you remember, like the time you discovered you both love cream soda, or squeeze the toothpaste tube the same way, or have the same favorite movie, whatever seemingly trite, insignificant thing you can think of that she will assign way too much importance too and think "Oh my God, he pays such painstaking attention to me!"). Say that you've taken a great deal of time to consider whether your emotions for her are serious, and you think that they are, which is the only reason you would even mention it to her now and that you know and trust her well enough to take you seriously as you now mention them.

At this point she will either be wrapped entirely around your finger or so thoroughly disgusted with you for carrying two extended relationships (of sorts) on. If you present yourself as a real man (this will be the biggest part, because from your post I get the impression that you really may not be), she should be happy to lean in. The key will be to paint your old relationship as something less than a fully-fledged relationship. If she sees it that way, she'll be fine with it. You can completely cut off contact with your girlfriend of 7 (JESUS!) years and your new girl will never know the full extent of it. If she ever does meet the old girl (by some freak occurrence; take pains to never let this happen), it will be in the light of 'Oh, this is that girl from home he messed around with whenever he had the chance,' not 'FUCK, this is his 7-year girlfriend who he's never known anyone else because of.'

You then need to tell your old girlfriend that you cannot move in with her. You have reevaluated your life, determined that you are simply not prepared to take things to the next level with her, and owed it to her to immediately let her know so you can avoid doing her the disservice of deluding her into thinking you had something more meaningful than you actually do. She won't take that easily, obviously, but again, if you do it in a manly, earnest fashion, she will simply see it as a breakup rather than a betrayal (which, let's be serious, this plainly is).

Or, if you (likely) manage to fuck up the delivery when you sit down with the newer girl, your old girlfriend is none the wiser and you can carry on in the dearest manner with the girl you love so, so much. Long story short, be a man, be smart, be strong and appealing, and prepare for an entire thread filled with posts ridiculing and insulting you. Good luck, champ.