1. Do you know of one other instance in the history of video games that did what Square did with this game? Where they took a chunk of an old game and created a fleshed out, in-depth, full-length, big-budget game from that chunk? Putting "Part 1" on the cover, as mentioned, would also cause confusion over the game's length. Whether they said that or not, either way wouldn't be perfect since it's a very unique situation.
2. How often is the word "Remake" used for an official game title? It's not a very traditional word to use for the official title. I thought it was odd when they first announced it, but it makes sense with the story direction of this game.
3. Selling a video game is different than selling a fatal liquid. Anyone who paid the slightest attention to the game besides just looking at the front cover will know it focuses only on Midgar. And if they didn't, then worst case is they own a new (great) game.