Well I am surprised no one has mentioned this but:
This is the best possible JRPG to do a retcon/reimagining of as is going on with FF7, but a bit differently.
Time travel!
So, start a new story with new characters, but intermix this with the old cast and story beats resulting in a completely new story that brings back old favorite settings and characters, introduces new ones.
Maybe you change significant plot points of the old story, maybe you don’t, maybe you doom the world to some entirely new kind of catastrophe, maybe you get stuck in what would otherwise be called a soft lock but is actually in this world an intentional plot device that just looks like a soft lock but isnt.
Hell, if you /really/ want to go hog wild with this:
Make the new set of characters generally opposed to the original set of characters, have their own method of time travelling, and make it so much of the game is actually about attempting to out-time-travel-wit the others, basically with certain characters attempting to be time demons ala DB Xenoverse and others trying to stop them… all mixed with the narrative possibilities at many points for many characters to switch allegiances, go rogue, or mostly team up.
even moooore possible endings
No I have no clue how you could actually write something this complicated, but the entirety of Kingdom Hearts exists and people tell me somehow that all makes sense, so I am confident a team of competent writers can pull off an absurdly complex multivariate story line.