OK, I figured out a way I'd like to see the world map done.
Split it into 'regions'. Each region is highly detailed with seamless towns and battles. Crossing from one region to another requires a loading screen.
Some areas cannot be directly accessed in a region. These places can be considered 'sub' regions. For example, after passing the Midgar Zolom, you'll see a cave entrance. Once entered there is a loading screen and you are transported to the Mythril Mines. At the other end of the Mythril mines is a cave exit that leads you to the region that has Fort Condor and Junon. So while you have these large 'regions' there can be entrances in them to more areas which are not restricted by geographical location or size.
Another example would be the Nibelheim Mountains. They won't have their own region, but that wont stop them from being expansive. Just like the original game, you enter in the Nibelheim region and come out in the Rocket Town region.
Highwind travel can be done by having it fly high in the sky over a map in the same style as the original game. But since you're so high you dont really notice the inferior graphics. If you settle over the chocobo farm and request to land, there will be a loading screen and you'll be dropped off at the exact location in the Chocobo Farm / Midgar region. Of course you can call the highwind to pick you up at anytime, as long as your not in a 'sub' region. This way you can experience the freedom, speed, and control the Highwind from the original game offered.