The following is a GRE practice test question which I don't understand.
According to this general argument, it appears that any arbitrary point $(x, 7)$ would have "height" equal to 10 but then if we have $x = 1000000$ for example it would appear that the area of the triangle would be significantly larger than just 30 units.
Or am I misunderstanding the argument given in this explanation?

As others have correctly pointed out, the height of a triangle is a measurement perpendicular to the base -- in this case, a measurement strictly in the direction of the y-axis, specifically $7 - (-3) = 7 + 3 = 10$. Indeed, making the upper point any value $(x, 7)$ would maintain the same height and therefore the same area of 30.
Intuitively, I would disagree that it would "appear" that the area of the triangle would be significantly larger if that were adjusted. While the triangle would certainly get longer, it would simultaneously get skinnier and thus the area would balance out to the same value. For example, here's the graph with an upper point at $(1000, 7)$ from Wolfram Alpha:
Side note: If you do enter the point with $x = 1000000$, then Wolfram Alpha chokes and erroneously says "not a possible triangle"! Apparently it really doesn't like a triangle so negligibly skinny.