I think I mentioned this in another thread, but I will say it all again. I personally think that Hojo was meant to be portrayed as someone who was unhappy and alone. Someone desperate for recognition, validation, approval, and someone who waned so badly to see something other worldy occur. I think the character Hojo was such a bad scientist because he was never really a scientist at heart. He is a horrible scientist, and seems mostly concerned with mythological things and proving the existence of a higher power. But he denies it and laughs at anyone who believes in such things. Again, projecting self-hatred.
For example, in Final Fantasy VII he wanted to witness Sephiroth become some god, and in Crisis Core he mentioned reading Loveless thinking that it could aid his research, but then dismissing it as "pure drivel" but still refers to Sephiroth as "the hero" in his missions. Since when do stories aid scientific research, hmmm? And in his missions, he mentioned that Genesis had a few tricks up his sleeve and in the original game he apparently got angry at Sephiroth for referring to materia as magic. My guess is that he longed for something greater than science, but he denied that part of himself. Vincent referred to him as a queer fellow who lacked scientific talent, Sephiroth said something similar. There is nothing scientific about putting humans in tanks filled with mako energy. That is not science. I don't even know what that is. Same thing with Red and Aerith. Anyone with one semester of high school biology would know that creatures of two different species rarely breed and if they do, two organisms as vastly different as Red and Aerith would not produce offspring. At all. Once again, not a good scientist. All he does is create monsters. Oh, and mythological creatures such as dragons. This guy was not a traditional scientist at all. I think he wanted there to be something. I think he was jealous of Gast, I think he might have liked Lucrecia but was never open about it. After all, why shoot her lover?
It was said that Hojo did not love her and that he only used her to be his specimen maker. Well, as long as he got a specimen out of her, did it matter if she liked someone else? No. He should not have cared but he must have. But then again, maybe he just shot Vincent because he was getting in the way and threatening Hojo. It's hard to say. In Dirge of Cerberus, that scene was portrayed differently. Hojo looked defensive and clung to his gun, but in the original he looked more frustrated that Vincent was confronting him because he pulled at his hair.
Hojo was not portrayed consistently. Originally, the story was simple. Shinra wanted a cetra to find the Promised Land so he could have his Neo Midgar thing and rule the world. SO he probably hired scientists to accomplish this. They try to, and find out later that the specimen was not a cetra. Gast leaves with a real one and Hojo was probably pissed. Sephiroth had been so fond of Gast but probably did not know that he just upped and left and probably did not even think twice about Sephiroth. Hojo of course wanted the real ancient but might have been angry that Gast just up and abandoned the project like it was nothing, leaving him with a silver haired child and no purpose for him. That is probably why SOLDIER was created, because they did not know what to do with Sephiroth and maybe Hojo had a helping hand in order to create opportunities for him. Most times, Shinra is portrayed as caring about Sephiroth's strength. Most likely, Hojo went to him and claimed that a military would be good for him and Shinra agreed. Otherwise Shinra might have discarded him.
Overall, I think Hojo was cruel and mean, but he did not seem carefree or calm, or charming like other sociopaths. Since he was portrayed as someone with low self esteem and (to me) looked somehow depressed, then perhaps that shows someone who might have had regrets and been unhappy. But we will never know. As for a backstory, I think one befitting him would be someone who was spiritual and religious, believing in gods or god or mythological things, who then loses his faith and sets out as a scientist to prove that those things are real. And if they are not, then make them (like making Sephiroth into a god, making dragons, mating an ancient and a dog lion).
One thing I always wondered though...why the hell didn't they disect Jenova? Hojo did not even bring it into the building. He just leaves it in Nibelheim. Crazy! Anyone good scientist would love to disect an alien specimen.