I can answer some of this, though unfortunately, a lot of the data that would really answer your questions (the PSX memory map samples) aren't available, because the Q-Gears SVN is down. Still, I can try and help.
Ok, I'm curious about the what battle datas are seperated and available for player controlled characters in battle
There's a block of memory assigned to character battle data. There are three sub-blocks, for each actor. Within each block, certain types of data (actor Max HP, for example) are stored in the same place (I can't give the exact addresses for the US release right now).
Alternatively we also have
-frog (frogged?) characters
-Mini's
Now I'm guessing that out of the alternatives when characters are frogged, does that just change the model used, or does that change the battle stats as well, so in that sense, we could perhaps edit the frog feature to be different creatures or characters?
As for mini, safe to assume that it is the same as those experiments where we have seen Red XIII and other characters shrink and grow in size.
Frog status makes the battle engine replace the actor's model with a frog, and actor animations with linked frog animations too. You could try and make the battle engine use a different model, but it wouldn't be a great idea if that model doesn't have the right animations. Data Errors are common when animations fail.
You'd think Mini was linked to a general 'size modifier' variable, like that used by Bombs, but IIRC it's hardcoded. I will check this.
As far as I know, young clouds data is tied in with vincent or cait sith somehow. Similar to Sephiroth. Or is it possible to edit those two to become new characters?
There are only nine 'characters'. The data for two - Young Cloud / Cait and Sephiroth / Vincent - are changed when the party meets Cait Sith, so that they have the right models, can equip appropriate weapons and may now grow stats / use limits. Their 'initial data' is swapped too, so that Vincent doesn't start with Sephiroth's HP etc. That swapping is a bit of a hack, and adding extra characters would be very, very difficult.
Now, there is one thing you could do. There's a dummy character ID called 'Chocobo'. It's there so you can use the party name screen to handle caught birds. Maybe, just maybe, you could try and make this dummy character usable, swapping Aeris with the Chocobo just as Sephiroth is 'turned into' Vincent. You'd have to find out how the game translates character IDs into the models it must use, and force it to use an appropriate monster model (which may not even *work*). You'll have to find out how to disable limit breaks for your chocobo character without disabling stat growth. If you could invoke the initial data 'swap' somehow, and add a chocobo character when Aeris goes walkabout, you might get something working. I wouldn't try it myself, though. Not for a million pounds.