If anyone runs into this red screen issue, I believe I have a workaround that so far seems to be working. I extracted the FF7_GameConverter_7H.exe and deleted a few lines within FF7_GameConverter_7H.bat.
The lines that I deleted are below. After deleting those lines the FF7_GameConverter_7H.bat seems to work, and patched the game after pointing it to FF7's install directory. I have made it to the Sector 7 train yard with all mods in the 7thHeaven catalog installed including The Reunion/Because and haven't noticed any issues. This probably isn't the best way to fix this, so it might not work for everyone.
Lines I deleted:
:: Test for Adminrights
NET SESSION >NUL 2>&1
IF ERRORLEVEL 1 (
COLOR CF
CLS
ECHO Access Denied, Installation Aborted...
ECHO Run this Program with Administrator Privileges.
ECHO Access Denied, Installation Aborted...>>FF7_GC.log
ECHO Run this Program with Administrator Privileges.>>FF7_GC.log
PAUSE
COLOR 0F
GOTO :EOF
)