Schedules changed a lot in those years.
During preparations for AS-204, somewhere in (early?) 1966 the plan was to fly AS-204 either manned or unmanned, depending on qualification of both the CM and the launch vehicle:
For a time, the mission called AS-204 had two flight plans. AS-204A, manned by Gus Grissom, Edward White, and Roger Chaffee, was "to verify spacecraft crew operations and CSM subsystems performance for an earth-orbit mission of up to 14 days' duration and to verify the launch vehicle subsystems performance in preparation for subsequent operational Saturn IB missions." The flight would be in the last quarter of 1966 from Launch Complex 34 at Cape Kennedy. AS-204B, on the other hand, would be an unmanned mission with the same objectives (except for crew operations), to be flown only if spacecraft and launch vehicle had not qualified for manned flights.
(source: Chariots For Apollo, chapter 8)
AS-201, AS-202 and AS-203 flew, all unmanned, successfully over the course of 1966, qualifying the Saturn-1B. So no, they were not planning to launch people on a Saturn without testing.
By December 1966 (just a month before the Apollo 1 fire on January 27, 1967), the schedule was revised, due to ongoing issues with the CSM delivery:
In early December, NASA reluctantly surrendered its plans for launching the first manned Apollo flight before the end of 1966. Mueller and Seamans then reshuffled the flight schedule, delaying AS-204 until February 1967 and scrubbing the scheduled second mission. Experimenters who had planned to place their wares aboard Schirra's spacecraft were brushed aside. Following AS-204, NASA planned to fly the lunar module alone and then a manned Block II command and service module, No. 101, in August 1967 to rendezvous with unmanned LM-2, the LM being lofted into orbit by a Saturn IB in a mission dubbed AS-205/208.*
If everything went well, NASA hoped to get two crews besides Grissom's spaceborne before the end of 1967, with at least one riding a Saturn V. Replacing the Schirra team as the second Apollo flight crew were James McDivitt, David Scott, and Russell Schweickart (backed by Thomas Stafford, John Young, and Eugene Cernan) for a workout of the command module and lander in earth orbit. To fly the Saturn V mission, AS-503, NASA picked Frank Borman, Michael Collins, and William Anders (with Charles Conrad, Richard Gordon, and Clifton Williams as backups); they would ride the spacecraft into orbit and out as far as 6,400 kilometers above the earth.
*) In July of 1966 they were talking about AS-207/208 being the dual mission, so it seems that AS-207 is being scrubbed here. AS-206 was a LM-only launch, per this diagram from 1968.
So yes, Apollo 1 was supposed to do in part what Apollo 7 did, but with a Block I CSM and not the Block II that flew on Apollo 7. But with all the uncertainty around the CSM and LM deliveries, there was no way that Apollo 5 (assuming sequential numbering after Apollo 1) was going to be a landing attempt.
The A-G missions were introduced in September 1967, with missions Apollo 4, 5, 6 already designated.