I have already put thought into this aspect of upgrading graphics. For character models, with all the closeups on them and the constant view of them I deemed it better to have better models, but in terms of polycount and details, ff7 models were quite well made (for the most part). battle models sometimes go upwards of 3000 triangles, equivalent to PS2 models such as those in kingdom hearts or FFX. The only issue being, textures. in most cases (unlike this diamond weapon) one would first have to unwrap the uvs of each part of a model (uv mapping takes awhile to get the hang of) and in normal cases create a texture. this will usually take place in photoshop, though stock textures can be manipulated to speed up the process, (instead of hand painting the textures). then, with the uv mappd models, they are reinjected into the game as one would do with any custom model (because they are cusotm now that they have uv maps) with the new texture ids. I hadnt gotten of my arse to test it out, but grimmy did it for me ^^. boss models in particular tend to be fairly well modeled. The weakest of battle models are in fact people, such as hojo, palmer, MPs etc.
I've got a lot on my plate right now, but if anyone wants to give it a try, i can provide pointers on uv mapping