Also, when they show Nanaki and his pups looking at a ruined Midgar, wasn't it like years into the future?
yes it was actually 500 years into the future which is odd because nanaki says he is 45 but in human years that is 15 so his kind ages faster so how did he live for 500 years??

but anyway i believe that ff7 lets you believe what you want to believe as shinigami_xero said. I always thought that humans were "deemed unworthy" by the planet and destroyed which is why you only see nanaki post meteor. I never even realised about the laughing i just took it in as part of the atmosphere.