Final Fantasy VII is magic.
I'd like to start by pointing out that what you consider "flaws" are a matter of taste, and that I doubt many people in this thread can agree on what the failures of the game really are, beyond the shoddy translation (which VI had, too). For example:
literally the only game ever to make me cringe at it's graphics and be actively distracted by how bad they are
I have no problem with the graphics. The artistry is still there, and to hold a game from 1997 to the standards of today, or even years later, is not fair. They were beautiful when they came out, and the backgrounds in particular still manage to set an incredible sense of place and atmosphere that I will continue to consider nothing short of
brilliant.
Final Fantasy VII is a great RPG, story-wise and mechanically speaking, that also happens to have an incredible soundtrack, varied and interesting cast, exceptional worldbuilding, and thematic elements that turn genre conventions on their head while also touching on the human experience.
Nostalgia only amplifies the game thats there, a game that can still stand on its own. Final Fantasy VII was considered amazing when it came out because it was amazing. Here is a wonderful retrospective on the game worth browsing through if you love the game, or can't figure out why others love the game:
Final Fantasy VII as compared to the rest of the series.
Final Fantasy VII is basically the "World of Ruin" section of Final Fantasy VI as an entire game.
For me, the game touches on something human that the rest of the series (barring VI and IX) only really dances around. It is a game about inheriting a planet full of blights and "baggage", full of screwed up and screwed over people, and learning to cope with the person you are versus the person you wanted to be.
It's about healing, and saving a planet that will still die down the road, only because life is beautiful and worth living.