9/8 or 9/4 are the same, it's just a question of whether you call the basic pulse an eighth note or a quarter note. The top number is significant, the bottom one really isn't. And neither of them can really tell you how to split things up (although other aspects of notation can give a clue).
John McLaughlin notated Celestial Terrestrial Commuters in 19/8 by the way. He could have used 19/16, not really a scrap of difference. From a notation point of view, there is no absolutely "correct" time signature for any piece of music, it's all down to convenience. You could write out Billie Jean in 11/8 if you wanted, but it would be a bugger to sight read. Your computer would play it perfectly, though.
From a real world point of view, then there is more often than not a definite pattern that should be reflected in the time signature top value, but the bottom value is really a matter of preference and ease of communication in most cases.
Anyway, back on topic...
I must disagree entirely.
The difference between 7/4 and 7/8 is quite noticeable since they are entirely different counts.
Just to write it out, 7/4 is:
1 and 2 and 3 and 4 and 5 and 6 and 7 and 1...
7/8 is:
1 and 2 and 3 and 4 and 5 and 6 and 7 1...