7 days post FUE and donor area is dry, scaly and itchy. Is it ok to apply organic lotion or would that hinder healing? (photo)

It is best to ask your surgeon about post operative care as each doctor has their unique regimen. Many doctors have their own lotions and recommendations for the donor area.

If a small punch was used, the donor punches should be closed by day 7. You may want to use a topical antibiotic ointment like bacitracin at night and perhaps the lotion during the day until the dryness subsides.

Usually, no treatment is necessary.  However, when the area is dry, moisten it.  Post operative biotin spray from Haircycle can help and it has antioxidants.  Other emollients will work well too.  Ask your doctor for an opinion.  Soaking the head in water will help, as well.  

After day 5 from your FUE the donor is considered healed and you can treat it normally. In fact you have to go back to normal washing and hair care as you have done before your hair transplant. You may need shampoo longer at this point if you still have scabs and by cleaning the area the scabs will be gone and that is how you can help you itchiness. Using oil at this point is useful.

Talk to your doctor. They likely have some lotions etc. in mind specifically for this purpose, that wouldn't affect the healing of your scalp. Once you're at the two week mark and all the scabs/crusts are gone, then you should be able to freely use whatever type of lotion you prefer.