If your 7" tablet is saying that it has a 1.5 density with 800x480 resolution, it has to be a bug in the tablet. Someone with an Archos 7 was reporting on here recently that his tablet returns incorrect specs, so it happens.
I have 21" and 23" monitors on my notebook and I use the 23" one for using the emulators. If I don't "scale display to real size", the emulators are larger, but nothing close to full screen. When I use scaling to 7" or 10", they are a little smaller than actual size, but that's what I always use so that I get a better idea of what button sizes and text sizes will be.
On my 23" monitor, the "monitor dpi" is 96. I think you said yours is about half that. Try increasing your monitor dpi.