Sephiroth made clear his intention to use Meteor as a means to wound the planet and induce an artificial apotheosis in the Temple of the Ancients. Aeris attempted to counteract this by praying for Holy at the Water Altar. This prayer was sufficient; even if Aeris hadn't died, the prayer would have reached the planet and the White Materia would have been activated.

However, the actual Holy magic was being blocked by Sephiroth. We're told as much during the Key of the Ancients sequence on Disc 2.

Cloud: Thank you... Aeris. Aeris' voice has already reached the Planet. Just
look at the glow of the White Materia. But...... how about Holy? How come Holy
isn't moving? Why?

Bugenhagen: Something's getting in its way.

Cloud: ......Him...... He's the only one that could do it....Sephiroth. Where
are you?
Sephiroth never intended for Holy to actually be used. He was successful in blocking it; only his defeat (which he obviously didn't intend) allowed the Magic to take effect.

As to your overall theory, there are several problems, I'm afraid. For one, JENOVA wasn't in Midgar. The being was at the Crater (where the Sephiroth Clones were summoned and where the battles with Jenova∙SYNTHESIS and Bizarro and Safer Sephiroth took place). Second, JENOVA is completely incompatible with Gaia's Lifestream. It's possible that JENOVA needed Sephiroth to utilize the knowledge and wisdom of the Cetra, but direct use is definitely impossible.

In the end, Sephiroth's stated intent was no deception. He intended to make use of the concentration of the Lifestream and, in effect, become a God. JENOVA, often argued to be manipulating Sephiroth's actions, would have been able to take advantage of this power. Meteor was needed for all this to take place, though, and Holy could have prevented the desired results.