Definitely not more than anybody else's.
I'm playing it now as well, and in 20 years since the game was made, many things that might have been socially acceptable, like calling somebody a retard, has become less so. The script should definitely be updated with modern sensibilities. I can't speak for the homosexual stuff in the game, as I'm not as familiar with that culture, but certainly if it is offensive, there are better ways to handle such things, as I think they should, and likely will do, with Barrett.
I don't think there's anything wrong with Tifa's design. Although I question why a martial artist would fight in a mini-skirt. It makes sense for a bartender trying to get tips, though. I also think people are conflating the obviously cartoony CG cutscenes (terrible CG) with her character model in battle. I think most of the pictures people have posted are about in line with her representation throughout the FF7 series and its compilation games.
And yeah, this translation is straight up garbage.