I've always been taught that extending the arm increases dural tension and may make the impingement at the root level worse. Therefore abducting the arm and resting hand behind head decreases this dural tension relieving some of the symptoms.
As far as why C7 radics get better relief than other levels maybe that the C7 nerves travel the farthest and therefore can give up more slack when arm abducted and elbow flexed. Whereas the upper cervical levels end higher up on the arm, shoulder and neck and may require more shoulder abduction or just might be fixed in the axial portion of the body and no amount of arm abduction or elbow flexion will provide relief. Just thinking out loud...
