The rail on the Henry Survival Rifles I have seen has been the Weaver Tip-Off 3/8" rail standard for .22 rimfires. Charter sold an add-on mount that used the action side plate screw.
Reliablilty problems with the AR-7 are usually magazine problems.
The feed ramp is a sheet metal tab at the front of the magazine, that is both user adjustable and can be accidentally bent.
The notch in the back of the magazine for the magazine catch will usually be worn in used examples, allowing magazine to sit too low so the nose of the bullet may hit the barrel below the chamber.
To keep the cartridge from popping out of the magazine and the bullet striking the barrel above the chamber, the older magazines had two pinches to hold cartridge as it fed; old magazines will be a bit sprung in this area. Replacement magazines for the later Charter and the Henry have a external spring to solve that problem.
Usually though an AR-7 will run well with a proper magazine and roundnose, high velocity .22 LR ammo