Adam,
I don't think there is a policy (that I know of) relating to having to fly on the same plane as your checked luggage is on. In 2004 flying from New York to Washington Delta screwed up our bags and they got put on the flight after us- and ended up waiting a while back for the bags to come through.
More recently I've heard of it happening on Qf MEL-SYD runs as well but being deliberately done to ensure the bags make it to destination- for example if the passenger is within the 30 min checkin time etc
7 pax unfortunately in this day and age isn't a valid reason to delay an aircraft for most airlines, but especially an LCC (as bad as it sounds). Putting them up in the hotel is probably a minimal cost considering they most likely have spare seats going out anyways on todays flight but missing their slot and the ongoing snowball from delays could be far more costly
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