Can I exclude a product or SKU from a discount?

You cannot exclude products from discounts in Commerce7, you can only include products in discounts.
When creating a promotion or coupon, you can set the Coupon Applies To section to only give a discount to products in a specific Collection or Department. To exclude a product, you just need to ensure that it's not in the selected Collection or Department.
You could also create a manual Collection called “Discountable SKUs” and then add all the SKUs you want to discount to that one collection. Then when you create a promotion or coupon, make it only available to the "Discountable SKUs" collection.