I know we can't take a lot of what Sephiroth said for gospel (the game's Sephy, not our moderator), but I've always been intrigued with his statements about the Cetra being an "itinerant race," of the species moving from planet to planet. For clarity, a dictionary definition (American Heritage):
i·tin·er·ant adj. 1. Traveling from place to place, especially to perform work or a duty: an itinerant judge; itinerant labor. --i·tin·er·ant n. One who travels from place to place. [Late Latin itiner³ns, itinerant-, present participle of itiner³rº, to travel, from Latin iter, itiner-, journey. See ei- below.]
If your story will be including the hunt for the last surviving Ancients, presumably including the role of the Turks and Professor Gast (who would have probably been in charge of the project during pretty much the period you described), then this is wide open for you to develop. I don't think even the original writers did more than vaguely speculate on this matter, and if it's up your alley, I'd like to see somebody's thoughts on it. Sadly, my thoughts are quite muddled...
But you know, I do get the impression that the Cetra used materia, even if not much nor often. The Black Materia was actually sealed away by them, but I don't think it was Jenova's... I think it was their own, a last-ditch defense. The Cetra weren't dumb, and in fact defeated Jenova and sealed her away as well, as I recall, so there's a lot of force and power there, as well as symbiosis.
However, I remember hearing Bugenhagen say that the lead characters shouldn't use materia at all, because using them hastened the death of the planet. They'd use it sparingly, I suppose. Goodness knows they had powers of their own, else the materia in the game wouldn't have done anything.
Oh, yes. I'm, uh, not a "story" person, much as I'd like to be. I'm a concept person who waits desperately and forever for stories to come along, and then fails to do anything with them when blessed inspiration finally strikes.