When I connect my iPhone 7 to my 2014 Prius via USB, it registers as being connected in iPod mode. This plays the first track, and then shuffles from then on.
When I connect my iPhone 7 to my 2014 Prius via USB, it registers as being connected in Bluetooth mode.
This has less of the legacy cruft associated with iPod mode, and I don't have any of that weird behavior - when I connect in bluetooth mode, my iPhone 7 resumes play in the same way it would resume play if I connected a pair of headphones, swiped up from control center, and pressed play.
Life got a lot less frustrating when I realized there was a difference between the modes - now I use Bluetooth exclusively, and charge the phone with an Anker car charging adapter. Much better not having to hear the first song on my phone every time I plug in my phone while I am driving.