I just re-discovered this thread. There's some really great stuff in here. Skyblade and silentenigma, you guys have made some really great posts. It's uncommon to see such thoughtful stuff being said about this game.
I myself like to think of Jenova as similar to Lavos from the Chrono games. FFVII, Chrono Trigger, and Chrono Cross all share a script writer (Kato) and the themes of all three games often overlap in interesting ways, such as the parasitic Lovecraftian alien intelligence that lands among an unsuspecting human population (which I have always thought is a very interesting take on the ultimate demon evil genre trope) or the idea that humans are not quite the worthy race that most games lazily spout during the Final Battle. In FFVII and CC - CC in particular - there is a huge emphasis on positive and negative. For every good thing that is accomplished by an individual (or a whole race) there is often a bad thing that off-sets it (and vice versa). Morality in one's personal life does not always lead to morality in one's social life - most of the AVALANCHE members are guilty of this is some way (Barret and Tifa, notably).
But neither game is ever really negative. For every bad thing that is shown, something positive follows at some point (again, Barret or Tifa). Neither game falls into the trap of showing one type of behaviour and then showing an opposing type, confirming that the former is a deception of some sort and ending up as a story about The Evil of Humanity or The Redemption Found In Love and Friendship. Often in games, someone will do something morally reprehensible but, later on, will be shown performing some kind of noble task that off-sets it. More than those of other games, I think the writers of FFVII and CC in particular are consciously trying to pose these conflicting scenarios. They flip-flop (not in a bad way) usually up until the end. Both games have ambiguous endings that, while a bit of a let down after a long journey, leave a lot to be talked about. Of course this cleverness doesn't always hold up since each game has some serious execution issues in spots (likely due to the fact that the games are, unavoidably, designed by a collective of writers, designers, and executives - some inconsistency is bound to occur in the final product because of so many different perspectives). But it's great that Squaresoft tried. They had some serious budding talent back then. There's probably a lot to be said if one takes into consideration the Chrono games when looking at VII.