As far as I am seeing on Snopes and CBS News, this 7-Up ad was a real ad in the 1950's.
NOTE! There is almost the same image circulating that claims to be about giving beer to infants. That is a FAKE ad. It looks virtually identical as this one, but replaces 7-Up with beer. Same baby etc.
There is also a "Soda Pop Board of America" fake ad, with the tagline, "For a Better Start in Life, Start Cola Earlier". It also features a photo of a baby, but looks different from this. That ad is also FAKE -> Hoax Ad
Are they like mixing 7up with milk? Wouldn’t that curdle the milk?
They're mixing Cream Soda with milk, and surprisingly no, the milk doesn't curdle despite being highly acidic. I have not tried it with 7Up, but it also works with both Coke and root beer.
Cream soda? Sounds oddly familiar. I think I may have tried that once.