Anyway back on topic, I think it's fair to say both games have characters it develops well, but they also have their Cait Siths and Quinas. Interestingly though you also had non-party characters like the Turks or Beatrix getting some development.

I don't think it's mandatory for every character to receive in depth development. Some of them really are there just to make up the numbers and from a gameplay perspective, those numbers are necessary. You can't keep cramming and shoehorning big long story arcs for every character in. Though it's certainly something FF has done more of with time, and in my opinion FFXIII was the first one to truly develop every single character. But then, they kind of peaked, climaxed and resolved their character arcs with a third of the game remaining, and it was dull from there so

While I'd probably say protagonists are equal, FFVII's villains definitely stomp IX's. Shinra, for me, are the best villains in any FF with such a huge variety of characters, motives, and an ever present and powerful threat. You also naturally have Sephiroth and I think at times he's so overrated that he's underrated. If you put aside the OMG SO COOL ONE WINGED ANGEL ~*so beautiful*~ nonsense, most people don't remember that he had a fantastic and menacing presence. This is especially true in the early part of the game when you never see him, you just see the aftermath. Trail of blood, impaled Midgar zolom, smurfing intense. It's like, "Do I really want to catch up with this guy?" With IX, Black Waltz, Brahne and Beatrix were all fine antagonists although obviously none lasted the distance for various reasons. The likes of Garland and Kuja weren't that great for me though - I just couldn't be impressed or intimidated by or even like or loathe them.

Anyway, overall it's a close thing. In my opinion FFVII has better gameplay, story (IX was doing just fine, and then Terra happened...) and soundtrack. IX has better art direction and sidequests. And naturally its save points stomp the trout out of VII's question marks xD I struggled to think which world was better as you have the incredible oppressive hulk that is Midgar but then also the lovely swagger that is Treno. I'll call that one a rub.