The layering issue actually isn't that difficult. You can use the game assets(assuming someone's extracted them) as a mask in Photoshop and recreate the layers that way.
That's not quite good enough. Because there's often parallax between the layers, you have to also re-create what's behind the foreground layers. Now you're no longer merely manipulating, you're drawing your own new art.
Most of the animations had very few frames so it isn't out of the realm of possibility.
But there's a lot of it in the game. More than most people remember.
But yes. The point isn't that it's impossible. It's that it would be a massive undertaking, even for modders. It crosses over from mere modding into actual development. Yes, maybe someone is attempting to do it for FFVII, but that's years after release, FFVII has a stronger fanbase, and who knows if that person will ever even complete the project... and if their results will be any good if they do?