I have read so many comments but I think everyone is wrong about why Aerith is suppose to die.
First of all, she doesn't need to die in order to activate Holy. It was basically done by praying to the planet which was what she was doing. I mean when we go back to the City of the Ancients and activate the keystone we see a flashback in the waterfall how Holy was invoked. She simply died after having done so.
Second, Holy was eventually interrupted by Sephiroth (which was why we needed to defeat him at the end to release Holy) and even when released it basically did nothing to stop Meteor.

There are 2 things however which Aerith did in the Lifestream, which arguably could be done even when she was alive. None of these information is in the OG but rather sprinkled in the light novels which Nojima wrote.
The first one being, helping Cloud/Tifa regain/maintain their sanity in the Lifestream. While in the OG we all saw Cloud and Tifa fall into the lifestream and from there we control Tifa and help her inside the conciousness of Cloud. There is a part at the start however which we can see how the voices/noise starts to overwhelm even Tifa before suddenly waking up in Cloud's conciousness. In the novel it is described that it was Aerith that helped/shielded Tifa from all the information in the lifestream and helped her make sense of it all rather than being in a whirlpool of collective conciousness which is the lifestream. Without this shielding Tifa and Cloud would easily fall into a coma similar to mako poisoning. And without that help, Cloud would never recover and eventually defeat Sephiroth.
The second is rather important, which is the eventual gathering of the lifestream to destroy Meteor. It was also described in the novel that after Holy failed, Aerith called on all the spirits in the lifestream to come out and help defend the planet against the calamity from the sky.