To get to this world you need to beat the boss of World 5-Castle as Mini Mario. This world takes place mostly in the clouds.
World 7-1
Start off by heading right and riding on the moving platforms. Let the second platform fall and head left. Jump to grab the first Star Coin. Ride the platform back to the right and jump off before it falls. For the second Star Coin, you must hurry. After the platforms, there are two ?-blocks and then a hanging wall. To the right of that is flying ?-block. Jump on it and let it carry you to the right. At the end, get off of it onto a cloud. Head up through the green warp pipe. Swing yourself between the moving poles to reach the second Star Coin. Head down the green warp pipe on the right. Unfortunately, this coin made you skip the checkpoint, so you cannot die. Go right and up the green warp pipe. Hit the flagpole to finish the level. For the third Star Coin, you must do the level again. Go back to where you jumped onto the flying ?-block, but don't get on it. Keep going right and through the green warp pipe at the end. Head right and get on the top moving platform. Grab the third Star Coin, and finish the level like your first time.
World 7-Ghost House
When you start off, hit the first block closest to you to reveal the switch. Jumping on the switch will reveal 5 doors. Head to the door on the left to get the first Star Coin. Exit the room and got to the door on the top of the screen. In this room, butt-smash (jump + D-pad down) your way to the second Star Coin. Activate the switch to the right of the Star Coin and leave the room. Go to the door on the bottom right. There are hands in the sky which are pointing towards an invisible box. Jump up to reveal it and then activate the switch. Once activated, head right to the moving platforms and climb to the top to enter into the door. To get the third Star Coin, activate the P switch and dash right as fast as you can. As you move to the right, you'll notice that some of the blocks are increasing in height. Climb up to those blocks, head right until you reach the Star Coin. Then head left until you fall onto the lower platform and move to the right and enter the door to finish the level. To reach the alternate exit, go in the place that was the blue switch that turns coins into blocks. Activate the switch and dash left as fast as you can, then you will notice a block above you head that shiny. hit it from undernearth and a vine will appear. grab on it fast, or else the switch time will end and blocks will become coins again. go to the top of the vine and enter the door. Here is the alternate exit flagpole. This will unlock a way to the toad house.
World 7-2
Start by going through the green pipe. Jump on to the platform with the arrows pointing up, right, and left. It will move depending on what part your standing on. In this level if you go off the side of the screen you appear on the opposite side. Steer yourself up until you see the first Star Coin surrounded by boxes. Break the boxes and get the coin. Steer up until you see the second Star Coin on the right side of the screen. On one side it's surrounded by a wall of blocks. Throw a Koopa shell at the blocks on the LEFT side of the screen which will break the ones on the right. The shell will also get the coin for you. Steer up until you see the third Star Coin. It's surrounded by flying Koopas, so be careful. After you get the coin steer up until you see a green pipe. Go through it. Jump on the flag pole to finish the level.
World 7-3
Start by jumping down onto the wriggler's back. You'll come to the first star coin, which is guarded by a Boomerang Bro. You can either knock him out by hitting the block he is standing on or shoot him with a fireball, and grab the first star coin. The second star coin is sitting on three unbreakable blocks, which require a running start to access. Jump up to the blocks and grab the second star coin. Then you need to go up the green warp pipe where the Boomerang Bro. is and you will come up to a green warp pipe and a yellow warp pipe. If you go forward, you will see brick blocks descending down to the flagpole. Ground pound the very first one you come to so that the vine is going downwards, and then as big Mario (not the giant Mario), you need to ground pound the next block so that you can climb down the vine for the third star coin and then exit out the yellow warp pipe.
World 7-Tower
Start off by going up past the moving blocks with spikes and go through the red warp pipe. As you go, you will see the first star coin on the right side of the screen. Wait for the blocks to move all the way over before dropping down to get the coin to avoid being squished. Continue on through a door that will bring you to a room with brick blocks and another door. Continue on through that door as well, and you will come to a spot where there are three blocks with spikes moving up and down. You need to move across the top of those blocks to get to the second star coin. You will come to the third star coin right before you enter the the final door to battle Bowser, but be careful not to get squished by the moving blocks.
World 7-4
Start off by going all the way to the right until you come to the very last spin block. Jump onto it and you will come to your first star coin. Jump onto the spin block again, and you will come to a pink bouncy mushroom and as you spin upwards, you will come to your second star coin. Continue up, gradually heading towards the left, and you will eventually come to the highest pink bouncy mushroom. You will need to jump on the very right edge the mushroom and spin upwards to get the third star coin. Keep spinning through the air towards the right until you come to a pink bouncy mushroom with the green warp pipe which you need to bounce up into to complete the level.
World 7-5
The first star coin you come to will be above some brick blocks accompanied by a Bob-omb. Bounce off a bullet to break the brick block, and the bounce off another one to grab the star coin. For the second star coin, you will need to be mini Mario. You will come to a mini warp pipe and you will need to use a Bob-omb to break the block above it. When you warp down, you will need to go to the right and get the mega mushroom from the '?' block and go to the green warp pipe and push it (not ground pound it) to get to the second star coin. The third star coin is in between two rotating bullet cannons, and you need to avoid the oncoming bullets to collect it.
World 7-6
Play the level until you hit the midway flag. There will be two sets of floating blocks. Grab your big guy from the question mark box. Break the middle box in the top row of floating boxes. Go down to the ground with the Koopas.Hit the middle box there and a vine will come out. Follow the vine to a small mushroom. Jump on the mushroom and it will carry you. Be careful not to fall and you will see the first coin in the air. Jump to get it. If you are going after the coins you can fall off to get them other wise there is a green tube you can take to get a new level. The second coin is after the vine in a area with two green Koopas. Defeat the Koopas and grab the star coin. To get the third star coin you have to go into the first yellow tube you see after the second star coin. Enter the tube and there will be three Koopas. Get a running start and jump on the last Koopa to get on a mushroom with a red tube above it. Go inside the tube and the coin will be right there. Finish the level and you have all three star coins.