What do the peaks on the graphs in figure 7-3 represent

The given graphs are Reaction Coordinate Diagrams which depict the conversion of reactants into products.

Diagram 1: Represents an exothermic reaction. These reactions proceed with the release of heat energy as a result the energy of the products is lower than the reactants.

Diagram 2: Represents an endothermic reaction. In contrast, these reactions proceed with the absorption of heat energy as a result the energy of the products is higher than the reactants.

In both diagrams, there is a peak or a hump which corresponds to the activation energy for the reaction. This is the minimum amount of energy required by the reactants as they collide to form the products.

it can be observed without changing the identity of the object.

it depends on what substance you're talking about as well as many other factors. in quantum mechanics, the observation of particles affects the observers ability to measure certain properties. for example: you can know the velocity of a particle, but you can't know it's position; or you can know it's position, but not it's velocity. it's like trying to find out where a grain of sand is by throwing other grains of sand at it. once you find out where it is, it's been moved. it's also like trying to find an answer to the question of whether or not a tree falling in a forest makes a sound if nobody is there to hear it. paradoxically, the only way to find out is to be there and hear it.