I am using up-to-date Eclipse Luna which should be ready for Java 8. However when I choose to create a new server with Tomcat 7 and click Next, in the Add and Remove screen I ca
That is because you just changed your JRE location in the workspace property, which TOMCAT relies on.
Please reset your tomcat property accordingly again:
windows -> preference -> server -> Runtime Environments. To the right of Runtime Environments, you should see the servers. Remove Tomcat 8.0 and add Tomcat v9.0. Rebuild project.
You can remove and create it again, or just update it.