So why are the N7 suddenly such a big deal?

They've designed far more than you ever will in your entire life 

🙄🙄

That's BDF for ya.

N7 is the Designation of top tier Alliance Special forces, N Being the number assigned to Special Operations and 7 being the most proficient on a scale of 1-7.

However its inclusion in Mass Effect 2 and Andromeda is questionable given the wearers aren't affiliated with the alliance in those games: In Mass Effect 2 Cerberus issued Shepard N7 after being revived for no real reason, and in Andromeda Alec continues to wear the N7 logo despite being expelled from the Alliance, while Ryder junior was never an N7 to begin with.

Of course this is all from an in universe perspective, marketing makes the N7 logo much of more of a personel emblem rather than a military designation, as explained earlier it makes for quite an effectice brand recognition tool.   

I get it, shit trickles down. I don't think this is necessarily the argument we should be making, in this case.

First off, N7 has prominence due to marketing. It peaked in ME3, then subsided in MEA as they are trying other branding out (and personally, I kinda like the tongue-in-cheek Ai more, even if I want a better future game and more 'AI' (SAM) involvement for it).
In themes, N7 represents Mass Effect in the way of being the 'man of action' is for a heroic story. And I think Mass Effect, so far, always aims for some version of a heroic sci-fi story, centered pretty squarely on the player character. If you're not N7, well I guess your family is. If your family isn't, I'm sure Bioware would prioritize concepts that would include N7 in your bio or future story beats somehow. N7 is badass savior, Ai is them trying to make you more of an inquisitive adventurer. Red and Blue.


In-universe however:

ME1 - N7 is human special ops. This means a range of things to people. If you're another species, it usually means little. If you're human, it usually means something. If you're human military, its a special rank that is developing something of a supernatural respect. Ashley doesn't remark because the script didn't lend itself that way, nothing more. You're a SPECTRE shortly, the Normandy is its own deal, she doesn't like to kissass (even for family its subtle), and ME1 is more that Shepard as a figure is imposing himself on others, not just his 'status' that opens doors for him.

ME2 - An N7 saved the galaxy so I'm so sorry but N7 now means something to the galaxy through to ME3 and indeed MEA because the Ai is from post-ME2. Its freshly part of the galactic special ops club, especially as Normandy SR-1 was still so associated with the Alliance. If there were internal feelings about N7 having supernatural air to military, its probably more widespread now. The game puts more emphasis on N7 in symbolism than before, but its more to show that its 'cracked' and 'broken' because this is the edgy second act. The influence of N7 even, again at least symbolically, spreads to the geth through Legion implicitly associating it with something he wants to be (or you can at least imagine that). The motto sometimes going around is that while SPECTRES are sent into the more galactic high risk environments with maximum deniability, N7s are increasingly understood as the ones that 'get the job done'. In a more rapidly unstable situation since pre-ME1, more are looking to what represents getting what needs to be done, done. There's the bits where the Alliance uses Shepard, and so apparently N7, as its marketing tool. This all makes N7 more universally understood as 'hero', even if on the action side of the notion.

ME3 - It carries the stuff of ME2, but now adds that in the demands of the Reaper War, yet decimated human and other militaries, N7 is more needed than ever, but less available than ever, so the Alliance does a callout to any that don't have other strings firmly attached to become honorary N7. While still dominantly human (and that's all our basic MP units), the proceeding war starts including many other elite figures of other species that want to join an effort that becomes increasingly human-centric (Crucible), even if also multilateral. Earth is deeply falling, but among the most resilient planets against the Reapers, and that acts as a rallying point. The Alliance is the biggest figure that is more initially decimated but taking most rapid action to 'get the job done' against the Reapers. Alien societies, governments, and militaries are either falling or utterly preoccupied with relatively local struggles, so that still leaves at least millions of highly skilled potential operatives, that want somewhere bigger they could employ their skills, somewhere to go. All-in-all, it rises N7 reputation to mythological heights to many, thus also the greater use of word 'legend' in this game. Post-ME3 we can imagine, no matter the ending, on some level N7 becomes a higher status symbol than ever, even if its more public than anything SPECTRE or similar.

MEA - It takes a step back to ME2 level or lower. ME2 level because the people in the Ai come from the ME2 Milky Way, but maybe lower because its a demographic that's actively trying to leave the galaxy and its trappings, and doesn't have official internal N7 ranking, with only Alec as our known N7 (then he dies). However, Ryder and some others are still from the Alliance and they respect, or used to respect N7 as the Alliance generally does. And the other species have at least a basic understanding or respect because they come from a post-ME1 world. They just don't have a *same* respect. Locals are relying far more on the rallied together APEX teams of relatively initially civilian/militia ability (albeit growing, and with the Ai's earlier well funded supplies and tech), and N7 is already starting to become something of an anachronism. That's why only one person gives you flack for wearing N7 armor, but its also why Ryder doesn't necessarily feel its entirely inappropriate he wears the N7 armor. Its up to the child to decide to wear their parent's stuff, and you can judge positively or negatively all you want, Ryder (implicitly, since there isn't a big story about it) can do what he wants about that. Wearing the armor doesn't mean Ryder considers himself N7. Far from it. He's grieving, even if as stoically as MEA's animations and script make it, and this isn't some harsh hunting token, but an icon or remembrance. I and PROBABLY YOU don't think that Alec would prefer N7 armor be on a museum rack compared to on his child that was going to get the damn Pathfinder SAM transfer of ability and authority anyway? Bailey has a limited understanding of the situation, while Ryder probably gets that N7 represents not something he'd be insulting by wearing the armor, but something he'd be constantly attempting to live up to while wearing the armor, while Bioware tries to make Ai into something that ends up (after this game) surpassing it in at least key ways.
That's my take on it at least. Andromeda is not a place that deifies or nearly deifies N7 like we could imagine a post-ME3 Milky Way might, but the Initiative population has a common respect for it meaning a lot to invested humans and that it played a prominent role in saving the galaxy as they knew it - they just still don't know how much that ended up true. Mass Effect is using N7 as a cornerstone, while also trying to move beyond it. The Mass Effect setting grew N7 into a cultural cornerstone, but the narrative focus shifting to its Andromeda trek reduced its prominence, importance, and importantly --- its sanctity.

Cos they have many leather- bound books and their apartment smells of rich mahogany.

This pretty much.

The same reason Chocobos and Moogles are a big deal in Final Fantasy, or the Master Sword in Legend of Zelda.

It's tied to the iconography, recognizable for branding, and pretty eye catching.

Nothing wrong with that, really.