To be honest, re-writing is really the best thing to make sure it's authentic. But I'm not sure the word "penalty" is the right word in this case. Let's say you don't change the article and use the same one for 700 sites. You won't get penalized because these articles are not on your site. The real issue is that they probably won't count as a quality inbound/backlink link because the content is all the same. So I wouldn't call that a penalty, it's just that the search engines will probably ignore that inbound link.
The people who are at risk for penalties are the people who use your article from these sites. They are the ones that will be using duplicate content. So you, the author will probably not get a penalty... but I'm wondering how much that will help you in the long-run.
Now, here's the issue I have... Is re-writing an article 40 times the best use of your time? Probably not. I honestly don't believe you'll get that big of a inbound link boost from submitting to multiple article sites. If I do use article sites, I usually just submit to ezinearticles.com and call it a day. But I personally wouldn't invest that much time into it... especially since Google and other engines are devaluing article sites. That's just my opinion from my experience.
You mentioned an article is now ranking #24 in Google. That's great. Just make sure when you track things like this you that that you evaluate the importance of the keyword phrase it's ranking for. I have some articles ranking #1 and #2 for various keywords but they are keywords that no one ever searches for (i.e., the article title, etc.)
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