First of all, you were in AP mode, and your Exposure was auto. Your ISO is at 400, which isn't going to help much. Did you shoot in RAW or JPEG? Did you apply any sharpening after the fact if you shot in RAW?
Shooting at f/1.8 isn't going to give you the best quality image. It's hard to tell on my phone but it looks like you missed focus. Lenses don't perform their best wide open - they can be a little soft especially if you miss focus. With such a shallow DOF it's not hard to miss focus either. ISO 400 has nothing to do with lack of sharpness IMO since with the d7000 that is a really low ISO. Underexposure, poor lighting, and missed focus will cause your photos to be soft.
Why at f/1.8? you don't need it for a shallow DOF. All you are doing is compromising the sharpness of the lens by remaining that wide. If that's the 35mm f/1.8 lens raising your aperture to 2.8 will be a GIANT improvement and 3.5 and it will be superbly sharp.
Backlight like that is also going to give you a little bit of a haze to cut thru. The image is very nice and will post process fine. It's just not razor sharp.