I had a similar problem on a vehicle just a while back, but the diagnostics were smart enough to actually tell me to replace the oxygen sensor downstream of the cat convertor. That being said, the error code you got could indeed be the downstream oxygen sensor acting up like you think. That is the oxygen sensor downstream of the catalytic convertor. One could pay about $70 to replace the downstream sensor (easy to do), and maybe the problem would go away without having to replace the cat convertor. Look at it this way: After 7 years, the oxygen sensors are about ready to go bad if they haven't done so already, so it really couldn't hurt to replace it anyway right now. A cat convertor is more expensive and might require a muffler shop to swap it out.
There is a small chance a spark plug is fouling and causing this problem, so it couldn't hurt to make sure the spark plugs are in top shape, too, something a 7 year old car probably needs anyway.