Sephiroth was born to Lucrecia and Hojo. He later went mad when he thought that he was born out of mako like the creatures in the reactor. Sephiroth later learned about Jenova and the Ancients. After figuring that his true mother was Jenova (which he was wrong) Sephiroth set the town of Nibelheim on fire almost killing Cloud. Zack went after Sephiroth and got defeated. When Cloud showed up, Zack gave him the Buster Sword and told him to kill Sephiroth. Cloud found Sephiroth on the bridge over the mako. Sephiroth stabbed him with the Masamune, but Cloud picked up the other side and threw him into the mako, thus killing him.
The Sephiroth that you fight in the game is a clone of the original Sephiroth created by Hojo to destroy the earth. Hojo used Jenova Cells and some of the real Sephiroth's DNA to create the clone. The 'Second' Sephiroth learns that Jenova coming back to life would be the end of Earth, but also learns that summoning Meteor would give him immense power, so he tries to do both. To beat Sephiroth you must fight the demonic Bizzaro Sephiroth and the 'Holy' Safer Sephiroth. Then go one-on-one with Sephiroth using Cloud. Crush him and boom no more evil (for a while anyway).

 

 

When Aeris was slightly younger, she dated Zack, and when she first met Cloud, she saw Zack in him since Cloud had no memory at first and copied Zack. Further proof is when they're on the Gold Saucer Gondola and she says to Cloud, "I want to meet the real you," which meant she wanted to know who Cloud really was instead of him copying Zack. After Zack joined SOLDIER and later disappeared, Aeris went back to Midgar with her adopted mom.
Red XIII's father was named Seto. He never really knew about his father until Bugenhagen took him into Cosmo canyon's caves and showed him the truth. Red XIII thought that his father ran from the battle with the Gi, but he later found that he was the hero. Red XIII visits his father's 'grave' often and can be seen doing so at the bottom of the screen. 

 

 

In the game, Cloud starts to fall in love with Aeris. He tries to protect her and keeps her in his sight during battle. When Sephiroth kills Aeris, Cloud puts her in the Ancient Pool has another reason to take Sephiroth down. Once Aeris dies, you can see her spirit at the Church in Midgar. Some people say that you can catch Aeris' spirit, take it to her body and revive her, but that is ... shall we put it a load.
In this game Cloud is often tormented by his thoughts and memories. What he thinks that he knows is not always the truth. Then he remembers (and learns) what really happened when Tifa and he enter the mako and she ends up in his conscience. Tifa also has feelings for Cloud which she shows in Mideel as well as other places. 

 

 

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