Yes, you can do a 7 part quest. It will take you a while, but it's possible. As far as having different versions of the quest, I don't think so. I could be wrong on this, but I haven't seen a way yet.

If you haven't already, you can check out the tut of sorts I posted a while ago about making quests here https://forums.elementalgame.com/399189 

You can also look in the ACP mod for how I did the few quests that are in there.

EDIT: Scratch that. I think there is a way to differentiate quests per faction. The faction tag goes in the Quest Condition Def tag (according to Frogboy's post). I can see where you could make it different for different factions, however, that would make this one huge quest to write. To give you an example, the Ranger's Boots quest in the ACP mod is ~260 lines of code. And thats 3-4 objectives without any differentiation between factions. So, it can be done, it just depends on how much time you're willing to put into writing it. The other thing I try to think about is that there are other quests and goodiehuts on the map. I don't want my quests to take too much time so that you can go and grab other quests/goodiehuts. But I suppose that is of personal taste.

During the holiday I wouldn't mind making a quest.  I just don't want to have to make it up.

I'm the anti-Kael, I like IMPLEMENTING but I don't like designing.

So you guys come up with a quest you like and I'll work on putting it in.

LOL! Maybe some extra triggers too. Personally, I would love to see quests be able to do something akin to random events in civ and galciv 2.

Faction tagging.

It works, but it's largely irrelevant for what you're trying to do.  What you want is a branching quest, which is achieved through, and only through, QuestChoiceDef.  Faction tagging be QuestConditionDef usage.

Currently, I believe you have an impossible goal.  The condition system does not move a quest forward when you complete one of many conditions, you have to complete them all.  The only thing you can do with faction tagging is either break a quest so that one faction or the other cannot complete it, or give alternative rewards in the end objective.  You can use these rewards to break or continue other quests later, but this would only limit based on faction, not be player specific.  It would not be a particularly obvious design either, so care in wording is required to help your users figure out how to use them.

If we get choices inside conditions, the quest you want to write is a breeze for the most part, assuming the other entries besides Kingdom and Empire work for the Faction tagging.  Just having a quest branched out to multiple endings is a cinch.  NextObjectiveID need not be the next in line.

Short.