I would hazard that its something to do with heavier barrels and automatic capability.

Modern Firearms is always a good site to visit for information about any particular firearm, including the C7:

http://www.world.guns.ru/assault/as44-e.htm

The only firearm experience that I have, is with the C7A1 which I carried when I served my conscription in The Royal Danish Life Guard. It is mostly similar, but it has a few differences:
- It can fire fullyautomatic unlike most M16's, which use three round bursts (Don't know how useful that would be in combat, but great fun when there is too many surplus blanks after an exercise )
- rails on the top are standard, while most M16's are still the older variant with a fixed, unremovable carrying handle/sight.
- the carrying handle/sight still used in some situations for the C7A1 is of a simpler design then the M16, with only two settings.
- It comes standard with an Elcan C79 optical sight. A really neat, but expensive sight. It has a small amount of radioactive lithium in the crosshairs, so you can aim it in the dark. The C79 even has some small sights on top, for backup use. Unfortunatly, some genius decided that these should be made out of rubber. The rifle that I got, had only been issued once before and the sights were already so worn down that they were useless.
- it is issued with black polymer magazines which are lighter then the metal ones issued with the M16. We had the problem with these, that if you accidentally dropped them on a hard surface, it would break to pieces and the loading
spring shoot out like a bullet. Don't know if metal magazines would do the same. I suppose the the solution is to not be so clumsy.

Having never had a Colt M16 in my hands, I feel reluctant to compare. However, the Diemaco C7A1 is in my humble experience, a great design and solidly build weapon that will not let you down.
The problems mentioned above are minor, and even in the hands of us good-for-nothing conscripts we found it to be a good, reliable weapon.

I don't remember seeing that particular symbol, but I do believe it was the same magazines that the Canadians use.
One of the clips I was issued was held together with a piece of tape. It jammed on the firing range. I reported this to the nearest Sergeant who took a look at it, and couldn't figure it out. He passed it on to the First Lieutenant, who after a brief examination concluded: "What a piece of sh#t."
I wouldn't mind the extra weight of a metal magazine, if only I would then be sure that it would work properly each and every time.

Why would anyone bother to paint a magazine? Doesn't it simply means more work cleaning your weapon afterwards?

also the c7's have tighter rifling in the barrel than the original m16's which helped accuracy a bit. 

You are Special Forces, aren't you HorseSoldier? Always running around with irregular uniform items, huge backpacks filled with two months supply of everything, and rifles customized and outfitted with the latest sci-fi scopes, night vision, thermal sight, flashlights, forward handgrips and who knows what else.
Us regular grunts are taught uniformity in all things, including rifles. We all had the same black rifles with the same sights and without modifications of any kind. I wasn't even allowed to decide whether I wanted to have the sling on my rifle. The entire company simply had the sling on their rifles when in the field. Period!