If you don't move forward, you're not really in the pocket...
The thing is, the 3, 5, and 7 step drops are DESIGNED drops. While a quarterback may be looking upfield during his drop, he's never going to throw the ball before he takes all of his drop steps.
They're coordinated with the routes the receivers are running. It doesn't matter whether you're in a shotgun or under center. That has nothing to do with your drop. And 3, 5, 7 STEP doesn't necessarily mean yards. I'm not sure how many yards it is, and I don't actually count the steps any more...I practiced it so much that the timing is ingrained in my head.
What you need to read during your drop are two things.
1. Safety first! Easy to remember. Read the safeties. It's important to know whether you're looking at a cover 0, 1, 2, 3, or in rare cases 4. With practice, you can know this pretty well with the safeties first step (also your QBs first step) (Also, by the way, it's good to try noting blitzing corners).
2. Offensive/Defensive line battle. Specifically, the battle between the tackles and ends. When a tackle is winning the battle, he has pushed the end out, toward the sideline. When the end is winning the battle, he is maneuvering in, toward the pocket. This is essentially your second step.
3. Blitzes. Did some linebackers come that you weren't expecting? If so, expect trouble in the middle of the pocket. Either way, this is step 3. In 3-step drops, this is when you quit moving backwards. It's not really necessary to move forward after a 3-step drop, simply because the linemen will form the pocket around you here. However, 3-step drops go with short passes. These are slants and comebacks, etc. Almost any thing that can come up when you formation audible into a quick pass is a 3-step drop play. 1-2-3 steps, and pass. Be familiar enough with the play to know who is most likely to be open and make your reads quickly. Go through the progression, find the open receiver, and pass it to him. But by the time you start going through the progression on quick passes, your feet are already planted.
4. Offensive/defensive line again. 5-step drop plays are medium pass plays, and 7-step drops are for long pass plays. Either way, by the 4th step and beyond, your pocket is either forming nicely or collapsing horribly. In step 2, you checked to see which ends/tackles were winning/losing their battles. If you're only doing a 3-step drop, it's only important to note if there is an immediate threat. In 5 and 7 step drop plays however, you're going to have to utilize the pocket, so you need to know exactly where it is, and exactly where you are safe.
If both tackles are winning their battle against the ends, then just feel comfortable knowing that you can take your fifth step, then look downfield, step forward, make your reads, and hit your open receiver. However, if one tackle is winning his battle and the other is losing, you need to start taking your drop steps slightly toward the tackle who is winning his battle. You're helping your team in two ways by doing this. First, it gives the losing tackle more time to attempt gaining the upper hand, while also relieving some pressure on him, reducing his temptation to draw a holding penalty. And second, you're bringing yourself closer to the most likely escape route should you need to scramble. If BOTH tackles are losing their battles however, it's probably time to break off your drop and try rolling out of the pocket and prepare to throw the ball away. Alternatively, if you have a RB on a swing route, you can dump the ball to him. Either way, you're in trouble, so ignore whatever was initially planned.
5.a. This step is for the medium passes. Around the QB's 5th step, the WRs are about to make their cuts. Posts, ins, outs, corners, deep comebacks, etc. You should have made your fifth step just before they make their cut. So, plant your feet and look downfield. With training, you'll be able to quickly make the pre-cut reads to know which guy is going to be most open off his cut and you can start throwing the ball to him. If you can't find the open guy after planting, looking, and watching them cut, now it's time to step forward into the pocket and continue trying to find an open receiver. Standing in the pocket will allow you more time to look, and allow you a more accurate pass. Also, even if you are sacked, you're taking no more than a 5-yard loss.
5.b. & 6. This step is for the long passes. Steps five and six in 7-step drops are more of the same of step 4. We're continuing to feel our way around the offensive line. We can also take glances up field to begin making our reads, but if we're calling a deep pass play, we want to make sure we take our entire 7-step drop so our receivers can get downfield far enough to get the kind of yardage we wanted when we called a deep pass.
7. Plant & pass. Seven step drop pass plays are the ones you're most likely to spend the most time in the pocket. Heck, on a 3-step play, you should have passed the ball in less time it takes you to take all 7-steps, but additionally, in a 7-step drop, we're stepping forward, and we're going to be gathering a lot of those backward steps back before we're necessarily ready to throw the ball.
Ultimately, the point of the drops is two-fold. First, it helps the quarterback get far enough back from the pass rush that he's able to make a throw. Second, it helps the quarterback keep his timing with the WR routes. It's important that you always take the appropriate amount of drop, if for no other reason than to keep your timing right. However, after taking the drop, you need to not move at all or be moving forward into the pocket. Moving forward is generally safer as far as avoiding sacks (and the times you do get sacked, your QB will usually take less of a hit, making him safer), plus you'll lose less yardage when you are sacked.
Moving forward or standing still also tends to result in more accurate passes.
(Except perhaps with scrambling quarterbacks in NCAA, for some reason, they seem to make more accurate passes for me when I'm scrambling out of the pocket to the left our right...but still slightly forward--never backward).