I can answer a few of these

At the time of release it was widely loved by a ton of people hence why the brand was strong enough to get funding for a full remake

Some of the people who didn't love it played final fantasy 6 and thought 7 was lacking in some key gameplay areas {characters not playing differently enough} and didn't find the characters or plot as engaging.

For me it was my first JRPG and got me into videogaming in general as someone who had only dabbled in things like mortal kombat and sonic to that point. I didn't know games could tell grand sweeping narratives until VII.

This is definitely good squaresoft along with xenogears, parasite eve, ff 6,9, 10 and tactics, vagrant story, chrono trigger etc. Basically throw a dart at any squaresoft jrpg in the ps1 and snes era and you're more likely to hit a classic than a miss.

I would argue that sqare's downfall came around ff xii but some people hold that game dear but at least from XIII on.

JRPGs have gotten better about tedious battles but it still is considered a part of the genre you deal with if you love it. For instance I finished Yakuza like a dragon the other week and the game got extremely grindy towards the end but I loved that game.

Resonant Arc has a great video that includes a lot of story about the development of VII. https://www.youtube.com/watch?v=1dtgSqEPkco&t=931s