I did not get that Cloud knows she's dead at all. Barret and Tifa also look like they're silently acknowledging he's off his rocker too. Especially when he starts talking about the sky. Even though no one else knows wtf he's on about
i'm 50/50 about him knowing she's dead, but the aerith at the end definitely isn't some sort of hallucination. red can sense her too so she actually is real.