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Go powerful women
Here we go friends. This is what the game tells us depending on where you are in it. Spoiler warining maybe. Anywho Ultimecia used a machine created by Odine that replicates Ellone's power to send people into the past. A machine that imitates Ellone's power coupled with the fact that Ultimecia is a sorceress could give her the power to possess and not just watch. Btw Faeries is what Laguna and the others called it when they felt Squall and the others presences. (Hoped that helped.) Also, Squall and the others never tried to take over or control Laguna and the others. They simply observed. As for Edea knowing about Ultimecia's plan it is at the ending of the game that you find that out. Spoiler During time compression Ultimecia traveled to the past and as she was dying she gave her powers to Edea. Squall went along and told Edea about the Garden and SeeD. Hope that helped ya all.