If I retire at 20, but only had two years in as an E-7, would the "high three" average my two years as an E-7 and one year as an E-6?

I was lucky in my time it was a simple two years in grade. I retired with exactly two Years TIG.

Simple math. Yes. You have to do 3 years as SFC to avoid it.

The highest 36 months of basic pay get averaged to determine your retirement pay whether you spent 36 months at your final rank or less than that.