Was it actually stated that he was 3rd class? I didn't remember hearing anything like that at all. I thought they left that unknown.
Yeah that was one of my biggest issues with how they changed the story. The best thing about Sephiroth in the original was the mystery and general sense of dread and foreboding he created by being so ethereal for most of the first disc. In Remake, they've completely messed that up by pushing him in so heavily in the first game. But they have nothing to actually make up for that, because he doesn't really have any kind of personality in this story.
They definitely needed to establish him as the main villain a bit more clearly than the original would have up to this point. But they should have just revealed him right at the very end (the end of the road after the motorbike chase), and then have him dump you into a Jenova fight for the final boss and then disappear. That would've been far better.