American Badass:
Ok, firstly, Zidane was a member of Tantalus, and therefore, he worked for Baku. In the Evil Forest, Zidane basically left Tantalus and no longer worked for Baku.

While in Tantalus, he was following Baku's orders which came directly from Cid who asked Baku for help in getting Garnet to Lindblum because the two of them go "way back" according to Cid, himself. So whether or not Zidane knew about Cid is rather moot. However, Zidane's attitude towards Steiner, and the fact that Zidane mentions never meeting Cid supports the idea that Zidane did not, in fact, have any knowledge that Cid was behind the whole thing.
I know he USED to work for Baku. However he didn't when he was being needlessly difficult with Steiner.

It's hardly moot. He was just following orders. So in real life do you forgive people who kidnap teenagers just because they were told to do so? If he didn't know the real reason for doing so then he has no justification.

Sephiroth is deep before he falls into the lifestream. After that event, any reasons he had before that justified what he was doing seemingly vanished. In other words, the past tense Sephiroth was a misguided villain and formed conclusions based off of inaccurate findings. The present tense Sephiroth wants to become God because he thinks its his right. Two very different ways of thinking there, and no bridge between the two.
Hence why I believe FFVII (SPOILER) Jenova took control over Sephiroth when he went insane, and is in charge of almost everything he does from then on. There's more to it but that's not for here. Though a later quote of your's on Kuja goes someway:

Its about point of view. Would you rather display your power and give your enemy an idea of what you can do, or would you rather manipulate things to the point where your enemy has no idea how strong you really are.