Suggestion on Nikon Camera and Lens.?

I'd skip the 35mm prime and get Sigma's 18-35 f/1.8 instead solely because of the variable focal length. Now this is predicated on the type of indoor sports that you're doing and where you'll be situated. For basketball, the 18-35 is a great choice if you're under the basket. But if you're anywhere else or shooting other sports like volleyball, then I'd skip the 18-35 and go with a 70-200 f/2.8.

Regardless of what body you use, you need to have a lens like the 70-200 f/2.8 to shoot indoor sports. So I would think that the best thing to do is to get the 70-200 f/2.8 and use it with your current body. At that time you'll know if your current DSLR is good enough or if you need to upgrade to a camera better suited for sports like the D610 or D750. I personally would skip the D7000/7100 for indoor sports and go full frame with either the D750 or the D610 because of their superior high-ISO performance. However, for shooting outdoor sports, an APS-C format DSLR can have an edge over full-frame because of it's 1.5x crop factor; it's like having a 1.5x teleconverter built in. So, if you're going to crop the image anyway with a full-frame DSLR, then why go full frame when the APS-C sensor will have more pixels in the same area vs full frame cropped down to the APS-C size which will produce better details.

I don't think the 35mm will have near the reach you will need. The 70-200mm will serve you much better.

The D7000 will be of very little help for low light. The biggest help is in the lens. f/2.8 is about the minimum you can go. And you will have to raise the ISO for many shots, but that is OK. The VRII lens is more for full frame Nikons, so there is no reason to not get the older VR lens. And, if you can use a tripod, the even older non VR lens would be a good buy.

So, stick with your D3200 and get the older Nikon 70-200mm f/2.8 VR, unless you can shoot without the VR, then get the non VR.

If I'm correct, the older Nikon 70-200mm f/2.8 VR does not auto focus on the D3200....that's why I will have to get the VRII which cost a lot more.

The Nikon 7000/7100 has a built in auto focus so I can use the older 70-200mm VR with this camera.

No need for a new camera. That 70-200mm f/2.8 VR would be wicked indoors even with your D3200.