a narrative device that lets the writers break the rules of storytelling. It allows them to ignore time and space, and create scenes and accomplish things that shouldn’t be possible. There’s a lore aspect to it such that our suspension of disbelief is protected - they’re not trying to insult our intelligence - but it’s mainly in service of narrative freedom rather than grounding the story. And the more the writers explain exactly how it works, the less freedom they have to wield it.
My opinion is that the primary function of the Lifestream mechanics is to allow Sephiroth, Aerith and Zack to be involved in the story when they otherwise shouldn’t be onscreen. Driving anticipation for part 3 is a secondary goal. Revealing the particulars to everyone’s satisfaction isn’t necessarily the highest priority; I only say that because these sorts of devices rarely get fully explained. However, if we do get a lore dump so spectacular the Dwemer of Elder Scrolls blush through their disappeared beards, I would be thrilled.
I agree with this assessment, but the problem with most theory-crafters is they think there is some intention of consistency on the part of the developers.
You are looking at things from the writer's perspective, which I think is more valid. I'm not one of these fans who expects the writers to 100% follow the laws of physics or else they are hacks. I don't expect the writers to adhere to pre-established lore.
I do expect good writers to create with purpose, that is, every piece of dialogue and story beat should matter to the overall story being told. The Remake series currently isn't giving me that impression.
The alternate worlds and other meta-textual elements don't seem like mysteries to be solved, but rather a transparent attempt to "keep people talking"(The devs have admitted this in interviews on multiple occasions). The resolution of all this can go one of two ways:
A: The alternate worlds are within the Lifestream. Zack really died like he did at the end of Crisis Core, and the Zack we see in the alternate worlds is his spirit attempting to hold onto his sense of self. Likewise is the world in which Cloud and Aerith have their dream date. There is only one physical world, the Beagle world. This is the world that Fate cares about and that Sephiroth wants to ultimately dominate. Aerith really died like she did in the OG, but she will now live on as a spirit possibly with Zack.
B: The alternate worlds are all equally real. Aerith will be saved by taking a version of her from an alternate world and reuniting her with Cloud. There are infinite Clouds, infinite Zacks, infinite Buster Swords. Together they will defeat Infinite Sephiroth. Cloud will merge with his OG self and Aerith will merge with her OG self and they will have interdimensional babies together etc. etc.
Even if I would prefer A, I still think that's a pretty bad resolution. Because it would render what goes on in these alternate worlds a lot less meaningful than before. Why should we care about an alternate Zack and Aerith if they are still dead in the one world that matters? Why bring up Fate if the story is going to be basically the same? If it does turn out the alternate worlds are an afterlife, then it would mean a major mystery of the Remake series has been utterly deflated. It would be like the authors waving their hands in front of your face just to pointlessly complicate the story they are telling. It would mean creating without purpose.
The best thing would have been to never introduce Fate or alternate worlds in the first place. If they wanted to include Zack earlier, then have flashbacks from Aerith's POV. It would be an easy way to introduce Zack without spoiling anything, and without people feeling like they need to immediately play Crisis Core to understand their relationship.
And I realize that misdirection is a common practice in story-telling, but that requires cleverness, like what was practiced in the OG. What we see in Remake is just Mystery-box Masturbation.