1) Too Many Changes?
Ooh, now this is a tricky one. On the one hand, a direct port already exists for FFVII, so an exact replica of the original game would be redundant. Why shell out your hard earned gil for an expensive remake when you can just buy a cheap replica of the original game? However, changing too many things could ultimately anger and estrange an entire generation of fans, the majority of whom will be Square’s key demographic.
Changes are to be expected, but if the game is altered beyond recognition, Square Enix may lose sight of what made the original FFVII so special in the first place. This is the fine line that movie remakes have to straddle on a regular basis, but few classic video games of this caliber have received the same treatment, aside perhaps from the original Resident Evil and Tomb Raider. However, the difference between these games and FFVII is that RPGs are far more intricate in their design, delicately balancing their story and gameplay mechanics in a manner that still needs to satisfy the majority of gamers.
Creating a successful RPG is a tightrope act on a good day and no other RPG will arrive with the same crazy high expectations as FFVII… so you could argue that Square are basically buggered either way really.
Good luck to them!