Well the damage has been done. There is little you can do except have good talk to him and see why this was his action to take. Kids are kids and do silly things with out thinking just like us.It may have been a funny thing between him and the other child. Some time out may be need .
he's only 7. The best thing (in my opinion) to do is talk to him about it and ask him why he did it. Yelling never helps anything, so try to be calm about it and make sure that he apologizes to the boy he tried to bully.
Well 7 years old is a bit late to start properly parenting, but better late than never I suppose.
I suggest you start teaching him right from wrong, in a serious manner, and that bad behavior has consequences like no tv for a few weeks, no computer, no cell phone, spanking, whatever you do, be serious.
First off: try not to giggle when you're giving him his serious talking -to.
Secondly, try not to get too upset with him. So he gave a kid a swirlie in the second grade. It's what second graders do. Along with eating boogers, "forgetting" to brush their teeth and flushing cherry bombs down the toilet. They fight on the playground and call each other butt wads. Back in the day, they put thumb tacks on teacher's chair and dipped little girls braids in the ink well.
Just tell him to follow school rules. It's a place for learning, not hooliganism. Stay out of trouble, because if he gets in trouble at school, you'll have to punish him at home, as well. Respect other people and treat them as he'd like to be treated. And if he does it again, you'll give him a swirlie when he gets home. :)
Now I'm gonna fo tell my husband what I've just read. Guarantee he laughs as he remembers doing just the same thing to someone whe he was in second grade