Build inside, so the window looks right? Whaa?
Lol, I don't understand myself sometimes.

I had to cut it that way so that when I made the window frame it would fit in somewhere - without the hole, the window frame would have just sunk into the side of the Inn and you wouldn't have seen it! So, the way I decided to do it was hollow out the buliding first and then cut a hole in the side to fit the window frame in.
Here's an example of what I was talking about:
Yes, I guess I could have done it like that and just stuck a texture map on the inside. I just hollowed out the rooms while I was there because that was my thinking at the time.

I've finished the Inn except for some pipes on the roof, and the two levels (upstairs, downstairs) are hollow. I'm not saying I
have to go in and do anything with it - and if I don't, I'll take up your suggestion and put in some maps. But it's there, if.. if you know what I mean.
Flying scene: That's what After Effects is for.
I don't understand how you would use AE for fly throughs - say I wanted to start just outside Nibelheim then go to Cloud's house (the doors are open) and then go inside - how would you do this without getting a 'seam' somewhere where the two 'parts' meet? I don't use AE often so any help you could give on how to achieve a fly through using it would be great.
There is no need to build the inside within the outside model. It would be a VERY bad idea. I speak from experience here...
I've done a train station before in similar fashion - I modelled the insides of the station buildings as well as the outside. It worked rather well I thought

Which reminds me, I haven't actually finished that - it's on my "to-do" list after this (so are a lot of things!

)