my father was in the same situation last year. old CI (expired) and old identity card. he managed to get a new HKSAR pasport and a PIC issued overseas from the immd. they will indeed need proof of 7 years residence and you current residency documents.
there is a site with information.
Application for Hong Kong Special Administrative Region Passport (Overseas) (For Persons 16 Years of Age or Over )
http://www.immd.gov.hk/ehtml/hktraveldoc_1_o16over.htm
you will also be able to apply for a new (permanent) identity card at the same time. more information form this site:
http://www.immd.gov.hk/ehtml/hkid_oversea.htm
just request the forms for a passport application and a overseas PIC application and fill and deliver them to a chinese embassy. but you will have to pay a fee for the HKSAR passport in HKD.
and for you.
you should be able to apply for something (ROA or RTL) whilst you are in Hong Kong. and the form should be form ROP145 if i'm right. you wil need your parents documents and other proofs. forms can be aquired through post.
www.esdlife.com.hk ( citizen - immigration information lookup) is a very useful site for that.