Thanks Tennyo, unfortunately most of that discussion would be left for a general topic on the lifestream and its workings. But I don't want to create a topic about it, so I'm just going to go off-topic here.
(I'm writing everything below on the top of my head, so sorry if it is badly written)
Final Fantasy VII, like many other fantasy worlds, is a dualistic universe. Aside from a physical universe, there is also the mental/spiritual universe. They co-exist, and I avoid calling the spirit energy just another physical existence because it is able to create and/or remove "virtual mass". In other words, Cloud can increase the force he exerts on an object by adding virtual/spiritual mass.
Remember F = m * a, where F is the force, m is the mass and a is the acceleration. In FFVII's world, the equation could be like this;
F = (m + v)*a, where v is the virtual mass.
This interpretation also allows for force to be exerted without any physical mass at all, which may actually be what we saw at the end of FFVII when the lifestream went against Meteor. In fact this makes sense, because if virtual mass REQUIRED physical mass to act at all in the world, it would be a completely separate universe that could not interact with the physical universe and thus give us Magic, Limit Breaks etc.
We can see the point with this interpretation for when Cloud wants to use a Limit Break, but what about all the levitation going on? Is there a negative virtual mass which is able to partially cancel out Cloud's own mass and thus make him impervious to the Planet's gravity?
I would much rather imagine that the spirit energy simply makes gravity "flow around Cloud". While there is no adequate quantum theory for gravity, let us still imagine that gravity 'consists' of a flow of gravitons which at all times interact with our bodies. It interacts at all times, EXCEPT when spirit energy weakens the flow of gravitons or changes its direction of flow.
It is possible, although difficult, to bend the 'flow of light/photons' around an object and thus make it invisible. Spirit energy in FFVII might be bending gravitons around bodies in a similar manner. Sephiroth would be one of the few to have completely mastered this art.
^This though is merely to rephrase the obvious. What is fascinating is how so small (?) amounts of spirit energy are required to do so great things. Spirit energy not only can add to the equation without becoming physical, it can actually become physical! This we see when Sephiroth's sword materializes in ACC, for example. Or is it really physical?
The lifestream is an ever-building flow of knowledge and consciousness. Materia contains "knowledge", the Lifestream contains "thoughts". It is not just a mere form of energy, it is an excellent coder of information! This is why I theorize that the holodeck we see so much of in Crisis Core is in fact mimicking spirit energy's ability to code into "physical" objects. What we see are in fact virtual objects; they interact, without physical mass, with the environment (see Force equation above) yet are not physical but virtual.
Notice though that when the "holodeck" falls apart after the Angeal-Genesis-Sephiroth fight, we see rectangular shards falling together. While the resolution of the virtual/spiritual reality may be great, it is not nearly as continuous or 'flowy/wavey' like the lifestream.
(Will make a second, shorter post which is more on-topic)