Sleeping 7 hours at night this young is AMAZING... honestly that kind of sleep on a regular basis shouldn't be expected until they are much older. Sometimes we get lucky! :)
Baby's nurse more during growth spurts. It's very normal. Its not only normal its necessary. Nursing every three hours at 3 months is not too frequent, and with that long break at night I am amazed he waits every three hours. Cereal doesn't have nearly the nutrients that your milk or formula does. It's not about giving a baby the sensation of a "full belly" - they are hungry because they NEED the milk. They don't overeat. He needs more nutrients to grow, to help his nerve and brain development. You should speak with your pediatrician on when it's ok to introduce cereal.
My pediatrician said nothing before 6 - 8 months, for instance. Even at 6 months breastmilk was the primary form of nutrition and cereal was just a little taste for texture and introducing feeding.
Something else I was told to do with my third child was pump and add formula TO the breastmilk to increase the calories. This way she still got all the benefits of breast milk (live enzymes, proteins, etc) AND added calories, nutrients etc from the formula. If you're worried your child isn't getting enough, or their weight gain isn't right on the charts you can talk to your doctor about this.
Good luck!