If it's properly fitted there's not much of a problem
with this. I'm also from Melbourne, and I've always
used a hood with my wetsuit. It makes sense since a
large part of the heat loss is through the head.

You can wear what you like-- there are no
"SCUBA Fashion Police" out there to check on
you. The biggest problem with shorter hoods is
the leaks at the back of the neck as you move
your head.

The shorter hoods are OK, but the cold water down the back
of your neck can be annoying.

I've never seen a 7mm hood, in any case.

-Don

Alot of people wear them all the time and it doesn't seem to hassle them but
I rarely wear them and don't like them

IMHE  If you don't mind a cold neck and/or cold water dribbling down your
back it can be done

don't think it would work but can give no reason

Check this out:
http://www.scuba.com/scuba-gear-28/022135/Henderson-Ice-Cap.html

The ice cap provides no neck constraint but provides some thermal protection
for the head.

If you don't like the feel of a hood try getting one size larger than what
will ordinarily fit.  Depending on the construction of the hood, you can
still minimize water flow over your head and stay warmer even though not
optimally sealed.  If it is neck tightness that bothers you most, you can
slit the back or front of the hood neck, stitch the end of the cuts, and
aqua seal a piece of latex to allow for expansion.

The drysuit hood when attached provides good blocking of water movement even
if the hood is loose.  A hood could be attached to a wet suit and serve the
same purpose.

The larger size hood is more comfortable even when longer.  The shorter
hoods in smaller sizes will restrict the neck movement more than a long hood
of larger size.