It creates a kind of contrast.
Her appearance might be considered 'raunchy', with her minimal clothing and capacious bosom. However, anyone who's expecting an "I'm-hot-and-don't-I-know-it" bimbo character would be very much disappointed, since she's actually a quiet, compassionate character with no sexual extroversion at all. I think it's an interesting idea - take a "stereotypical video game hottie" and give her a pesonality that doesn't match the stereotype at all.

It all goes to show that appearances are only skin deep, and looks don't determine who you really are.

The three women in FFVII all have radically different body types. The same could be said of the men, as well. Identical characters are dull, so it adds variety.