In Mother 3, the Seven Needles were mysterious objects set by the Magypsies in order to seal away the Dark Dragon. Whoever pulled the most needles would determine the fate of the world. Only chosen ones who could use PK Special were able to pull them. In Mother 3, the Masked Man pulled three, but Lucas (Mother) pulled the rest, and all life and time was reborn.
In Mother 3.5, the Seven Needles are located in the seven Caves of the Future. The needles are watched over by Cavemen. However, the backstory of the needles is much different this time around. The Nowhere Islands were used as a secret weapons outpost during the war which would leave humanity almost entirely destroyed. All the weapons were stored on the largest island, Three-Mile Island. However, on the other islands there was a far more dangerous power kept in storage. It was to be used as a last-ditch plan. There were seven switches set on the islands in bases concealed far underground. Each switch was bound to the same thing: the most massive bomb ever devised. If the weapons base on Three-Mile was lost, the seven triggers would be systematically pulled, setting off the bomb and taking the planet with it. If the Three-Mile Army couldn't be the victor of the war, nobody would. However, only a person with the correct genetic makeup could successfully release each carefully devised switch. Therefore, each trigger's respective watchman couldn't set it off themselves. As chance would have it, a direct missile strike to Three-Mile Island set off all the weapons, decimated the entire island and obliterated the Three-Mile Army. With no way to escape, the switch-watchers had to wait for a long time underground, exposed to the switches that couldn't be released. Much later, these switches came to be known as "The Seven Needles."
As it turned out, one didn't need the "correct genetic makeup" to set off the switches after all. Lucas managed to release them without the correct genetic makeup, which turned out to be the key to stopping the bomb- if a switch was pulled without the genetic makeup necessary to cause it to work, it was deactivated, and if enough were deactivated the bomb would never go off. Lucas managed to deactivate four switches, which was enough to foil Porky Minch's plan to end the planet, leaving nothing and nobody (except his immortal self, of course.)