Like MrsFairStrife said, he did make Cloud who he is now. Hell he got all confused and mixed up his own life with Zacks, which is something of a big part in FFVII - e.g. in Nibelheim when he thought he went in and helped people and saved people, thought he was 1st class, well..in SOLDIER at all really.

Cloud's guilt etc also stems from Zack's death, but that's more going in to AC. Besides, Zack gave Cloud his starter weapon :P