Corrected sentence:
Stars are very far apart, but sometimes they seem to line up. Long ago, people connected the stars to make pictures called constellations.
Why this is clearer:
- "Sometimes" shows that the stars only look lined up at times, not always.
- "Connected the stars" is short and easy to understand.
- "Make pictures called constellations" explains what people did and gives the name.
Your original sentences were mostly correct — these small changes just make the meaning a little clearer for a 7-year-old reader.