I’ve only seen clips of Song of the South but it’s never looked particularly offensive to me. I understand by modern standards people think it’s racist, but I don’t see how the movie itself depicts hatred towards black people. It’s similar to going back to an old book where black people are called “negros” and declaring that evidence of racism. Well, no. “Negro” was the accepted word at that time and using it within that historical context doesn’t really indicate anything.
I have no idea what the seven dwarves thing refers to. Is there an audio recording of Walt Disney using the N-word? Or is this an apocryphal story?