I feel like a lot of the answers here aren’t really addressing the question? The reason where are only 7 letters despite there being more notes is mostly due to simplicity and the fact that there are more than 12 notes.
The original western scale was essentially A natural minor, and that is what gave us the notes on the scale: A B C D E F G. This scale had no flats or sharps, so all you needed was the 7 letters.
In terms of the sharps/flats, you also have to keep in mind that on a harmonic level, if you tune your instrument to play a perfectly harmonically accurate Bb scale, you’re going to end up with a bunch of notes that will be out of tune if you try to play a different scale. This is called just intonation: on a harmonic/frequency level the C# in an A major scale and the Db in a Bb minor scale are different pitches, if only slightly (but noticeably!). You can find demonstrations on this with synthesizers and computer programs that give you exact pitches.
So if you get picky with it, there are countless different “notes”, depending on where the note falls in the scale. Back in the early modern period, musicians would literally have to re-tune their instruments when they changed key, otherwise a bunch of notes would be noticeably out of tune.
This was all changed with the advent of something called “equal temperament” — basically designing instruments to “cheat” those differences between C# and Db so that you can play in any key you want without needing to re-tune. It is why even a perfectly tuned piano or guitar will still have some slight wobbly/out of tune notes (particularly the 3rds and 5ths of a chord) depending on the key. Most of us don’t hear this because we’ve grown up with equal temperament in effectively 100% of western music for all our lives and it doesn’t phase us.
All that is to say that the 7 letter formula was the original format and people stuck with it for simplicity — to try and give every possible note a new name would have required countless letters back in the just intonation days, so people didn’t bother. By the time equal temperament comes around and you really only have “12” notes, the standard for musical notation was set across Europe and it didn’t make any sense to change it.
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