Alliance Marine Mass Effect
The N designation does mean special forces. N7 is the best of the best in special forces.
According to the codex, the N course is a 6 level training course.' Initially, candidates train for more than 20 hours per day, leading small combat teams through hostile terrain with little sleep or food. Trainees who do well are awarded an internal designation of N1 and are invited to return. Subsequent courses - N2 through N6 - are often held off-planet and include instruction in zero-G combat, military free-fall (parachuting), jetpack flight, combat diving, combat instruction, linguistics, and frontline trauma care for human and alien biology.The highest grade of training, N6, provides actual combat experience in combat zones throughout the galaxy. If the trainee survives these scenarios in 'admirable and effective fashion,' he or she finally receives the coveted N7 designation. N7 is the only ICT designation that may be worn on field or dress uniforms.There is little shame in failing an N course - the training is so extreme that even qualifying for N1 elevates an officer to a position of respect. The universal prestige of merely attending the academy helps to restrain trainees from taking excessive risks in pursuit of higher honors.Although ICT qualification by itself does not guarantee higher rank, those officers who are able to complete the program are typically well suited to senior leadership positions.'
Mass Effect Federation
-(ripped from the wikia.)Thus, N7 means Shepard did all that while proving to be an effective leader, while being shot at by several hostile forces off-world, probably involving Batarians.