If you are looking at working with WebSphere Application Server v8.5 integrated fully in RAD v7.5 the same way as you currently are doing with WAS v7.0, the answer is simple, you can't.
WAS 8.5 is not supported with RAD 7.5 and as a result, there is no official installation method that you can use. Even if you found a way to get around all the normal obstacles you will have issues along the way. Refer to this page to see the supported application servers for RAD 7.5.
If you want to work with Rational Application Developer fully featured with WebSphere Application Server, you need to use a version of RAD that fully supports the version of WAS you want to use. For WAS 8.5.5 that starts with RAD 9.0, but later versions will also work. If you also need to work with WAS 7.0 at the same time, you will need to find a version of RAD that works with both those versions.
RAD 9.0 supports both WAS 7.0 and WAS 8.5.5 but from what I can tell it seems like RAD 9.5 and 9.6 also works with both WAS 7.0 and WAS 8.5.5 (generate a support report for RAD 9.0 later)
On a side note: Also keep in mind that by now RAD 7.5 is outdated and official support has ended long ago. You should consider upgrading for that reason alone.