Hello!

I'm not sure where you heard that you can start with seven people not five, however, that is not true in VV4. Five people is the maximum amount of people you can choose to start your tribe with.

The easiest way to pause or unpause Virtual Villagers is to press the space bar, which will pause the game immediately. You can also pause or unpause the game by selecting Options from the Menu screen and pause the game using the setting there; however, the setting won't take effect until you either return to the main game screen or quit the game.

If you paused the game using the second option, that's what caused your villagers to die.