If I'm entirely honest, I don't know why anybody who really, truly loves the original FF7 would want this anyway. If they did this, they'd be undoubtedly doing it as a massive-budget game, aiming for a larger audience than even other FFs. Comments made by Wada, Kitase, Toriyama and the like all point plainly to this. They almost certainly wouldn't have the stones as a result to put it out with a turn-based ATB battle system in the current age when for all intents and purposes its big ticket RPG rivals are things like The Witcher, Elder Scrolls and Bioware's stuff. At the very least they'd make it faster-paced, less menu-command oriented and cinematically driven ala FF13, but more likely go even further. I can hear the PR copy for it already - battles that finally look like the hit movie, Advent Children, yadda yadda.
To me -- at that point it wouldn't really be FF7 any more. I wouldn't want to see any of them rereleased in that fashion - 7 isn't some sacred thing, I just don't believe in significantly adjusting any of them to that level.
I'd be all for a solidly budgeted remaster sort of deal, where maybe they yank out the blocky chibi field models and replace them with battle style ones (done by fans on the PC in mods), fixed the translation, that sort of stuff, but with so much of FF7's assets lost to time and poor archive keeping, it's an improbable if not impossible task - it'd have to be a ground-up rebuild, which brings us back to why it'd have to be a big-budget game with big-budget appeal and thus change things as a result.
I don't think some of FF7's deeper quirks like your Honey Bee Inns and the like would make it through that transition untouched either. They were a product of their time, and in a 'new' game they'd probably be adjusted accordingly.
That's the main reason I wouldn't really want this; I think they'd have to change too much of what gave the game its tone and flavour to be commercially viable as a big-budget remake. I also think most of the expanded universe compilation stuff (Dirge & AC in particular) completely tonally misfire and misunderstand what made the original game so special, so that doesn't fill me with confidence either. Dirge is widely regarded as a turd by everyone, Advent Children - especially the complete version - is a very competent trick that's fooled a lot of people but it too is also a terrible mess. I'd also just rather they spent their money on more timely development of more original products, FF and otherwise (how about a new big-budget console IP out of Japan?) rather than trying to relive past glories.
On the other hand, I do think this is more likely to happen (as a big budget remake with lots of changes to modernize the soul of the game as well as its skin) than ever. Wada as CEO was quite conservative about this particular issue, and was a bit scared around it due to FF7's reputation as a flagship game for the company, a legacy-definer. All signs from how he talks point to Matsuda being a bit more gung-ho as CEO. If he thinks it'll make a profit and not tank the company I think there's a fair chance he'll do it.
I would absolutely kill for Square to do flat-level remakes of 7-9, though, as I say - the same game, but with tweaked assets, fixes and minor adjustments, even if it was from the ground up, like what happened with the SNES games to GBA, or CT to DS. Because they were smaller budget, because they were on handheld, because they were intended to sell a couple hundred thousand, they were allowed to exist as B-tier games in the same form they did as S-tier games in their original time. If you put out a FF7 remake as a triple-A title in, say, 2020, it'll have to have the gameplay systems, attitude and style to potentially sell 10 million in 2020... and a simple visual overhaul layered upon the same systems wouldn't do that. Square plainly doesn't believe in that sort of battle system for a big budget game either; the FF13 series and FF15 are proof enough of that. Everything would need to be reconsidered at every level, and at that point - is it FF7 any more, or is it just a new game with the same characters, story and world?
TLDR: I was one of the people, then, who breathed a sign of relief when the PS4 announcement was just an uprezzed port and not a complete remake.
Given the resolution difference, I've always thought the 3DS would be an ideal place to fudge a low-level remake of the PS1 titles, as they wouldn't have to re-render all the old CG backgrounds (which in the case of FF7, only exist at what is essentially 320x240), but as the years pass that seems to become more and more unlikely, sadly.
APZonerunner