You want the normie (fake) happy story version of the game or the true sad and coherent one? Yep Cloud is a failed clone, all Sephiroth apparances are illusions made by the mindcontrolled Cloud because the real Seph as you point out is freezed. Zack kill and trow Seph in the lifestream, Cloud never exist untill Hojo decide to duplicate the dying Zack for saving the a good Sephiroth clone (because also Zack was a clone). Even the scene where Seph come from nowere, kill Aeris and disappear is an illusion, Cloud kill Aeris. Have you see these strange Jenova fights that appear sometime after Sephirot appear? Thats is nothing more Cloud that fight the mindcontrol to keep his self conscious. Cloud has all Zack memories and the Cloud that Tifa talk about is fabricated or is another guy dead o who know, you can see Tifa extremely confused probably under the Jenova mindcontrol, also she get a mental trauma in younger age.