Think of Mode 7 as this:
Each sprite that appears 3d is simply getting bigger and it's Y coordinate gets larger as it "gets closer" to the player.
The ground is a simple sprite (the tan color) that covers the lower 2/3 of the screen. All the rocks and stuck can be more srpites that get bigger as the y coordinate increases.
The player never actually moves, instead the button inputs inform how the sprites should move to create the illusion of movement.
For instance, If I press LEFT, all the sprites should go RIGHT.
The road can be accmplished with a series of horizontal strips of road that animation in a similar fashion.
That's how I'd do it in construct.
But honestly, I'd probably switch to Unity if I was trying to do Mode 7, and just make a true 3d game.
Mode 7, like passwords, is a relic of engineering magic needed to accomplish something new tech can do much easier.
Hope that helps!
Thanks alot.