Are you using a USB 3.0 or 2.0 port? If you're using a 3.0 port, you have to use a USB 2.0 port because 3.0 needs installed drivers before it can work normally. The installer says CD/DVD driver missing because it doesn't detect the drive but thinks you're installing from one because Windows 7 was released before installing from USB was an option.
If that's not the case, it would be a USB installer creator error... Rufus is know to work but no program of the type is 100% failproof... Next are some I've used that never failed (except maybe once/twice when it was my own mistake).
Try any of these USB installer builders:
in order of preference...
1. Windows 8 USB Installer Maker good for any Windows version (Vista to 10)
2. Universal USB Installer Maker also good for Windows 10
3. Linux Live USB Creator (LiLi)
4. Rufus
http://www.howtogeek.com/127377/the-best-free-tools-for-creating-a-bootable-windows-or-linux-usb-drive/
http://www.makeuseof.com/tag/10-tools-make-bootable-usb-iso-file/
https://www.raymond.cc/blog/how-to-install-windows-7-faster-using-usb-flash-drive/
http://www.intowindows.com/4-free-tools-to-create-bootable-windows-7vistaxp-usb-flash-pen-drives/
http://www.toptrix.net/2012/03/bootable-usb-making-tools-windows-linux.html