I agree... mostly. As much as I can- I haven't actually got the whole, or even ver much, of the plot yet.
It's defintely Jenova thta's using Sephiroth, but I don't get how she is him. How she's taking his form. I though it was just that she was manipulating him (in all those ways you said).
Looking at AC, she's just manipulating Kadaj. He hasn't been completely taken over by him, because he keeps going on about being a 'remnance', a 'puppet'. He's actually hurt that he's not that important to her. She hasn't just taken on his from... or whatever.
I couldn't even see that with Sephiroth, but maybe. I supposed it was because he was mentally very unstable, and she was freakishly good at manipulating him.
They're trying to please her, amybe. At least Kadaj was. I suppose it was different with Sephiroth, but not so different.