Part of the magic of narrative is leaving room for interpretation. The Gi were an opposing tribe. Nanaki's father defeated them all, but their spirits lingered on. Seto himself was trapped after being struck by a poisoned arrow. I don't need to know any more than that to realise it is an emotional moment. I can speculate on the nature of the Gi, but because it doesn't relate to the main plot, I don't feel like Sephiroth or Shinra are literally the only things that are bad in this world. I mean, look at your life. Does everything make sense? Is there only one bad guy?

Could you imagine how little we would have to talk about if everything was explained? It would be horrible to sit around having the same threads where one person says "this was a thing" and everyone responds with "yes it was". Blech. I like opinions, even "wrong" opinions.