Apache to serve both static file and webapp

You need to explicitly remove that location from the proxy by using the ProxyPass "!" directive. This should be done in the Location what you don't need to be proxyed, and this block should be written after the proxy block, like this:

<Location />
  ProxyPass http://localhost:7070/
  (...)
</Location>

<Location /auth>
  ProxyPass "!"
</Location>