The argument that dxiv made in a comment is, I think, the most elegant argument. As comments are ephemeral, I'll reiterate it here (with some additional details): note that
$$ \frac{|x|^6 - 1}{|x|-1} = |x|^5 + |x|^4 + |x|^3 + |x|^2 + |x| + 1. \tag{1}$$
This is actually a specific case of a much more general result: for any natural number $n$,
$$ \frac{t^n-1}{t-1} = \sum_{j=0}^{n-1} t^j. $$
This can be proved by an induction argument after noticing that
$$t^{n+1} - 1 = t^{n+1} - t^n + t^n -1 = t^n(t-1) + t^n - 1.$$ In this particular case, we take $t = |x|$. In any event, since all of the terms on the right-hand side of (1) are nonnegative (and $1>0$, i.e. $1$ is strictly positive), it follows that
$$ \frac{|x|^6 - 1}{|x|-1} > 0. \tag{2}$$
Note that
$$ \frac{a}{b} > 0 \iff (a>0 \land b > 0) \lor (a< 0\land b < 0). $$
That is, a fraction is positive if and only if both the numerator and denominator have the same sign. Applying this to (2), either
$$ |x|^6 - 1 < 0 \qquad\text{and}\qquad |x| - 1 < 0, \tag{3} $$
or
$$ |x|^6 - 1 > 0 \qquad\text{and}\qquad |x| - 1 > 0. $$
Therefore if we assume that $|x|<1$ it immediately follows from (3) that $|x|^6<1$, and vice versa.
Alternatively, we can make your approach work. The first part of your argument is basically an induction argument. We can actually strengthen that result a bit and get the following:
Proposition: If $|x| < 1$ then $|x|^n < 1$ for any natural number $n$.
Proof: The proof is by induction. Assume that $|x|< 1$, and note that $|x|^1 < 1$, providing a base for the induction. Now suppose that $|x|^k < 1$. Then
$$ |x|^k < 1 \implies |x|^k \cdot |x| < 1 \cdot |x| \implies |x|^{k+1} < |x|. $$
But $|x|<1$, which proves the result.$\tag*{$\blacksquare$}$
Taking $n = 6$ gives gives the result in the original question. Then, as you note, the converse requires an additional argument. Following your instinct of attempting contraposition, you might consider the following proposition:
Proposition: Let $n$ be a natural number.
- If $|x| < 1$ then $|x|^n < 1$,
- if $|x| = 1$ then $|x|^n = 1$, and
- if $|x| > 1$ then $|x|^n > 1$.
There may be more elegant arguments, but the induction proof above can be used, mutatis mutandis, to prove the two new statements. This gives a kind of trichotomy, from which you can conclude that if $|x|^n < 1$, then $|x| < 1$.