I dunno - even as a teen who loved the game, the world of Final Fantasy VII didn't make a lot of sense to me. Why is Midgar so horrendously densely populated when there's a load of fields and clear land (and a cute Chocobo ranch!) just to the south? Who travels across an entire desert to get to the Golden Saucer, and how does the world's economy manage to sustain it? Why are all these little towns so dramatically technologically behind Midgar?
FF7 is in pretty much the same position as every other Final Fantasy game (1 through 9, at least) in that it's got an amazing aesthetic world with an incredible feeling of atmosphere, but the actual plot makes virtually zero frigging sense. FF2 (the real one, not FF4) and FF6 both also have awesome worlds that make absolutely no sense at all.
To this day I have no fucking idea what the plot of FF2 even was. Okay, there's an Empire that wants to control the world, but it seems like it already
does control the entire world, so it sends out a dreadnought to bomb all of its own citizens to... consolidate its control? Then the Emperor, who is already the supreme unchallenged ruler, kills himself (or we kill him, I forget) and goes to Hell for... a reason, and we have to follow him into Hell and kill him, which saves the world which was already carpet bombed and destroyed. Ok!
Final Fantasy games work best when you don't think too hard about them and just sort of let them wash over you with the music, visuals and all that.