Alright, I've got a lotta things on my mind, so I'll list them one by one.

As for the cause of their distrust towards Barret for the village burning caused by SHINRA and NOT Barret, Barret and Dyne were possibly investigating the reactor or just plain taking a walk. Scarlet's unit attacked Barret and Dyne on their way back to Corel and ended up seperated. Barret wasn't the direct cause of the fire, so they had no reason to blame him whatsoever. Sure, he could've prevented nasty things from happening, but is it really Barret's fault if the Shinra a) persuade him that Mako is the better energy source as opposed to coal and b) massacre his village when he didn't HAPPEN to be there. If his absense was his fault, then Dyne would've been equally at fault, but just because Barret came back along, as varpol blade so elegantly put it, every tragedy needs a scapegoat.

Another thing. It was Scarlet that proposed to build the reactor near their village, not Barret. And he wasn't the only one who was up on the idea to build it. The townspeople also agreed with Scarlet, so he couldn't be at fault. Because Barret was the only one that wasn't there, it would've been convenient to blame him. People tend to do that.

As for their attachment to their hometown, it is understandable. As Barret said in Midgar, "People don't leave because they're too poor. They stay because they love their land that much." When you're born in a city, you tend to have a certain love for it, dispite the fact of whether it's a hellhole or a glamourous city. Barret was referring to Corel as well as Midgar, I'm almost positive on that, because he, too, was raised there.

As for the foiling of Shinra's plan to bulldoze Corel into the ground, the people realized what Barret did for them during that circumstance, they felt they had to forgive him. After all, what he did for them was much greater than what he forgot to do years back. In short, everything wraps up nicely unless anyone wants to make something of it.