Using JoomSEF basic rewriting for content extension changes the entire url structure as I am upgarding my site from 1.5 to 1.7 so I don't want to change the url structure as it was (i.e. menu alias).

Can JoomSEF basic rewriting has the feature of forming urls from menu aliases?

No it hasn't.
Another solution to force the use of .html extension in Joomla would be through custom rules in your .htaccess file. But that's outside the scope of our support. You can either find more information about that on internet, or we could probably configure the .htaccess rules for you, but that would be paid service.