I believe your problem is attributable to your OS being 32 bit.
A 32 bit OS can only use an absolute maximum of 3 gb of RAM for
any single 32 bit programme, such as FSX is.
This is assuming that there are 3 gb remaining after that used by the OS and background processes.
Here is a link to help explain
http://msdn.microsoft.com/en-us/library/aa366778%28VS.85%29.aspx
I also believe that the IMAGE_FILE_LARGE_ADDRESS_AWARE referred to is applied by FSX SP2, so your system should be using the most RAM that it can.

Insufficient memory will prevent textures from loading and result in what can be seen in your screenshot.

Even with a 64 bit OS, FSX, as a 32 bit programme, can only use up to 4 gb of RAM and in practice will start to struggle well before that limit is reached.

The 707, while being an excellent model, is capable of disrupting my system, despite its Intel i5 2500k 4.3 mhz processor, 8 gb of ram, Geforce 570 GTX graphics card and running in Dx10 under Windows 8 64 bit, especially if I cycle views too often between outside and the various excellent interior views.
I don't have enough experience of the 737 yet to make a valuable comment but I would be surprised if the same did not apply.

I can suggest two possible solutions, one is to turn down your FSX settings until there is enough memory available to display the aircraft textures correctly.

The second is to apply the recently released Dx10 patches by Steve Parsons and try running the aircraft under the Direct X 10 preview.

I would advise wasting no more time reinstalling, I suspect that your installations are fine.
If you have modified your FSX.cfg file, it might be worthwhile renaming it and trying the new one that FSX will build.