Try a forced restart of your 7:--> Force restart iPhone – Apple Support
If you get no improvements, something could have gone wrong with your latest update process.
I would try to install a fresh copy of iOS, making a full backup of your iPhone, then restoring it to factory settings and, in the end, setting it up as new, as per these instructions:--> Restore your iPhone, iPad, or iPod to factory settings – Apple Support
When done, test you keyboard using Notes or SMS apps, WITHOUT restoring data from backup.
If everything is okay, restore data from your previously made backup:--> Restore your iPhone, iPad, or iPod touch from a backup
Regards
Giulio