Does special file /dev/swap exist? If not you need to create it.
How exactly you do this depends on what kind of disk you have set up your system with. If you are using an rp disk (rp03/rp04/rp05/rp06) there is usually some swap space between the rp0 (normally root) and rp3 (normally /usr) partitions. For example, if you are using an rp04 disk, you should have the following special files in /dev:
brw-r--r-- 1 root 6, 0 Dec 30 20:46 rp0
brw-r--r-- 1 root 6, 6 Dec 30 20:43 rp3
crw-r--r-- 1 root 14, 0 Dec 30 19:51 rrp0
crw-r--r-- 1 root 14, 6 Dec 30 19:51 rrp3
brw-r--r-- 1 root 6, 1 Dec 30 19:51 swap
If you're missing the /dev/swap special file you can create it:
# /etc/mknod /dev/swap b 6 1
# chmod go-w /dev/swap
There is a makefile in /dev that you may want to look at.
If you are using rl disks, then I would guess that you need to configure a new kernel set up to swap to an rl02. I am not entirely certain how to do this (I've never personally tried to do it). In /usr/sys/conf there are some sample configuration files, including rktmconf and rkhtconf which show how to configure a system to use an rk disk. Presumably the configuration for an rl disk would be similar.
If you don't have those sample configuration files, it might be easier to just set up a fresh Unix v7 installation on an rp disk using the v7 distribution tape. Here are some documents that may help you with this process:
http://gunkies.org/wiki/Installing_v7_on_SIMH
http://wsxyz.net/v7/
I appear to have done this at some point in the past (using an rp04) but apparently I did not make any notes on the procedure I used. But I have it working so I know it's possible.