@Xelane: Concerning your second-to-last post, I had thought of that, except... Sephiroth, at that point, believed Jenova to be an Ancient. Did he have any idea about the Jenova Reunion Theory? He knew about the "calamity from the skies" that had killed all of the Ancients, but he didn't know that the calamity was Jenova.
Concerning your last post: At one point in Dissidia, Sephiroth is seen pulling his sword out of nowhere*. He can probably make it vanish into thin air as well. Though that's in Dissidia and not in the original FF7. Still, there's no other explanation. And I think they made the sword so long to make him more intimidating and unique in his own way. And it did really work to help make Sephiroth the iconic figure that he now is.
*
Here. <---(And in regards to that vid, at first I thought Cloud said "What I want most... is to find myself!"

(That bit's at the end.))
I'll follow up on your point, though. Sephiroth uses his sword very irresponsibly. He just leaves it in Tifa's father's body after he kills him. What if Zack were the one to pick it up and not Tifa? The risks this guy takes... He also leaves it in President Shinra, but is seen with it later. (He probably encountered the Midgar Zolom in the marshes and thought "Crap, where's my sword?" and had to go back to get it :lol
Finally, in FFVIIAC (and in ACC), after Cloud defeats Kadaj, Kadaj's blade is seen falling down the side of a building. Yet he mysteriously gets it back when Sephiroth dissipates.