I don't know about you, but with the constant mentions of time compression approaching, I went and finished up everything I could before I moved on. I didn't exactly know that the cities were going to be blocked, but I had a feeling that there wasn't going to be much to do except infiltrate Ultimecia's castle.

Like others have said, if you have the Tonberry GF, you're perfectly fine. I don't know, but I also think you can still get Tonberry after time compression too. Not sure though, it's been a while since I played through.

Warning: spoilers below.

About a sequel: no. Like somebody said, the whole plot was tied up. We know what is going to happen: Ultimecia is going to come around somehow and all the SeeDs are going to die fighting her until there's nothing left, at which point, through time compression, Squall and the gang will show up and kill Utlimecia. But that's only what would happen if time works like I think it does.

If I'm correct, Ultimecia never completed complete time compression. However, because they defeated her while time was compressing she may have been wiped from existance throughout time and space. However, if this was the case, none of the events of FFVIII would have happened because since Ultimecia no longer existed, Edea would have never been possessed and the whole sorceress ordeal would never have happened. Then again, I might just be confusing myself because I have nothing better to do.

Making a remake with a different plot would be pointless. It would be a completely different game, and if you're going to go that far, you might as well just make a completely different game with different characters and a different world.