Come on, they'd have to do a story where they bring the characters back from the original, or what's the point?

And as far as not having magic, it really does make it touchy to do any kind of extended story. You could handwave it, but not without seeming lazy. And trying to do a Final Fantasy game without the signature magic spells is just pointless.

If it were me (and it isn't), I would do something involving Figaro using its newly developed submarines to investigate a series of ships being lost way far out in the ocean. They find the wreckage of the ships deep underwater, right next to the remains of the Sealed Gate.

So Edgar gets Setzer to take him to Mobliz (Setzer has been funding the building of a proper orphanage, now that he's not blowing all his money on liquor anymore), and asks Terra if she would mind going on a submarine voyage to investigate...and we're off!