Also, when the dialogue is:
Aeris: "He's too big for us to adopt him."
Zack: "Sorry, friend. You don't belong here."

By "you don't belong here" did he mean he can't join them in the Lifestream/Heaven like you don't belong with the dead?[/QUOTE]

I think it means that yeah, he doesn't belong in the lifestream yet. I think he had a near death experience and that was his "white light".