The fantasy aspect I don't have a problem with. The fact that there isn't even an attempt at storytelling at anytime in the film.
And yes, I'm referring to the beginning of the film. Where we see the ending of FFVII re-shot using AC's CGI engine. typically starting a film off a scene set in the future is done to set up the story that will follow. Like in Citizen cane where you see the main character, supposedly dead and the entire story is a flashback. Or in "It's a Wonderful Life" where the film begins with the angels talking about the main character committing suicide, and the first 3/4 of the film is a flashback about all the events that lead him to that, and the angel interfering.
But nope, AC just sorta, sticks it in there for no discernible reason whatsoever. Like hey, how bout having cloud with a busted sword arm telling the story of how sephiroth came back and crippled him, and his friends saved him. Or maybe have Someone who's life was dramatically affected by the events in AC, like maybe having one of the three seph clones survive and be a good guy and he tells the tale to some villagers he just saved from a monster. Instead, nope. Its fan service. Stupid fan service. Like, am i supposed to get all giddy that we are seeing the ending sequence again. Am I supposed to squeal like a schoolgirl about seeing RedXIII and his children better animated? Cuz it certainly didn't do jack for the story.
EDIT: You can accuse me of nitpicking, but I think this just shows the lack of focus AC has. Nomura stated that if he thought something was cool, he stuck it in regardless of whether it was believeable. I guess he thought starting the film off this way was "cool" as well. Try and stir all the fuzzy warm memories of FFVII istead of, y'know, starting the film off with something that actually meant a crap to the overall storyline of the film.