Absolutely fair points. but you've really only addressed the sound and visuals, which most would be expecting SE to upgrade, and the least problematic areas for any possible remake.
I'm not saying they can't deliver a visual and audio update that I would 100% be happy with. It's the gameplay that's the minefield. Would today's mainstream be happy with the same exact mechanics? The same submarine/chocobo/motorcycle minigames with a lick of paint?
I remember the submarine game being very fun. And really, those minigames don't take a lot of time and aren't much of a far cry from the cheap and entertaining experiences you might find on Xbox Arcade or mobile phones. People still play and enjoy them, and I don't see why they should stop, especially when the mini-games aren't even a huge part of the experience unless you make them. I know some people who are still trying to breed golden chocobos. Slight updates in gameplay at the most. Updates in presentation though? Yeah, almost certainly. But along the lines of the original, not trying to mould it to something that exists from some other game. "If they had our resources back then, what would they have done?"
But even beyond the mini-games, would people find playing FFVII fun? I think so. You'd make some tweaks, perhaps, make it a little faster in presentation and game time. But that's what you test concepts for. And Square has certainly been making steps in the way of RPG combat gameplay, so if there's nothing you can learn from that, you're already making bad steps in the remake. Considering the kind of chemistry you'd have in place before work could even begin, I doubt it would be a serious problem. You'd use the same way of thinking as you do for visuals and audios. You ask very important questions, and look at them from a viewpoint that's very intelligent in regards to considering the emotional and ludic effect of the original game in all of its aspects,
translating them instead of replacing them.
That goes for the story as well. I wouldn't touch Midgar much. People love Midgar. Even Don Corneo. That in particular is supposed to be a fun and light-hearted sequence in the midst of a really run-down, shitty time in the heroes' lives where they don't really know if what they're doing is right or wrong. You can't take the exact same approach as the original, perhaps. That approach might not work and that's certainly a possibility, but at the same time you can't just strip out the humor. It's bad for the audience, and it's bad for the performers. And Advent Children had absolutely NO sense of humor. Maybe an alien's sense.
So you'd throw around some of these slightly difficult things from FFVII, see if they still get a good response. If not, you try to work with it until it functions again.
With voice acting, you have to take a more considered approach to the lines. I would definitely have some rewrites to make the dialogue more natural
in places. That is, without 1: Making it seem like it's been poorly translated, and 2: making the game feel like it's being taken over by a team that doesn't care about the game's soul, something that can change very easily if you don't watch your step. It is whatever team's responsibility to translate the mind of the original. A brain transplant, right? Same program, new shell. But what must be taken into account is the VAST psychological difference between dialogue experienced through only reading, and dialogue experienced through performance. That's just something you can not fully understand until you have seen written dialogue performed for the first time.
That said, you would still make an effort to keep as much as possible from the original script. As much that still works on an emotional level without making people gag, roll their eyes, or laugh inappropriately. And also a part of that is knowing who will probably be directing it. Scenes that may come off as wrong with one director will come off right with another who understands how to shift tone without breaking suspension of disbelief. We'd still be entertaining people here, in a slightly different way than the original, but not to a different end result.
Sorry this is so long. I just do feel convinced it can be done. The only reason it isn't -- and is constantly being rejected by the officials -- is that Square Enix is in a bad spot right now. The stars are terribly out of alignment. Fingers crossed for XV's success.