Cloud's multiple swords unrealistic? I'm sorry, if you still expecting realism from the FF series, you might as well quit RPGs now. Did you ever wonder where Cloud put 99 elixers in FF7? I'm glad they atleast tried to answer the question of where the hell all those weapons go. Also, Cait Sith was hardly even in the movie I have no idea how you could possibly compare him to Jar Jar Binks. The story was thin, but that's because of two reasons:

1. It was meant to tie in with CC's and DoC's plot line. Not FF7's.
2. It was a short movie.
3. It was a fan service.

Yes, Sephiroth probably was just there to appease fans. But as an appeased fan, I couldn't possibly complain about him. Not after I splooched my pants after seeing him. Personally I think they did manage to fit a lot into the storyline. It may've seemed liked they were pulling things out of their asses, but DoC and CC will mostly likely expound upon it.