A note to the kind of quest, Red XIII would be a great storyline to do... and (prepare for character bias coming up...) throwing some Vincent in wouldn't hurt too much... Since they both have to do with Hojo from their back-stories. They also both have a quiet and reserved part of the group.
I'll probably shoot myself in the foot for this one, but if we're talking about characters that don't get much coverage, Yuffie would probably bean interesting plot for a side-quest, seeing as she's a thief, and almost any story can fit into thievery
She also has a very undeveloped backstory in FF7
Just some ideas.
As for making things compatible, it would probably be accomplished a lot easier by first developing a stand-alone mod, and then maybe asking the creators of the other mods if they know a way or not. That way you have a base mod that can be backed up and then altered. Unless you plan on incorperating other mods with it, which you would have to ask permission first :]