does a 7mm 2.5" inch SSHD fit a Mac mini 9.5mm HDD area without any additional work? I have a Mac mini (Mac Mini 5,1 Mid 2011 , 2.3GHz intel Core i5, 4GB RAM) model that has a stock HDD (Toshiba MK5065GSX 500 GB SATA III 5400 RPM).

The HDD has a SMART issue and I have ordered Seagate's ST500LM000 (500 GB laptop thin SSHD).
The only thing I am worried now is that Toshiba HDD had 9.5mm size while the SSHD has 7mm thickness. Would new SSHD be compatible and inserted without any extra stuff,effort and adjustment OR should I stick to a 9.5mm drive only ?
I think there ought to be enough play in the connectors that it will fit without further modification.

The only real issue with a mini is that the drives are fixed from underneath rather than from the top. This will move the connectors by 2.5 mm from where they initially were.

Judging from the iFixit guide on adding a second drive, there would appear to be enough play in that connector strip that you will get away with that small move.

Compared to all the effort to get in there, though, if you find you don't have enough play in it, packing out the top by a couple of mm really shouldn't be much of a challenge. We're talking beermat depth, or a couple of pieces of folded card, not major engineering work.