Isn't a large part of the charm and atmosphere of FF7 precisely because the visuals suggest much more than they show? The rendered backgrounds in Midgar, for example, are presented at quite unusual angles and there are lots of walled off sections. Your imagination fills in a lot of the terrain and scale.
I'm replaying it at the moment, having not touched it in fifteen years, but my enduring memory of Midgar is false, from a gameplay perspective. It's an impressionistic presentation which suggests much much more than it shows, and this is its great atmospheric strength. Can you really improve on this by allowing you to see every corner of Sector 7?