Hi,
Try below steps to upgrade your workbooks.
1. Open the 3.5 queries in BW 3.5 query designer and save it with different name (say X).
2. Open this X in BI 7.0 query designer and save (say X7.0).
3. Open X7.0 query in BI 7.0 Analyzer and save.
Hope it gives idea!
Thanks,
Umashankar