Weapon models can be changed more easily but requires tools like Luksy's ULGP or similar; unpacking the battle.lgp and then renaming some files should do the trick. In this case, you want to make a copy of the file called SACK (this is Sephiroth's Masamune) and rename it to RTCK (cloud's buster sword). The files that go from RTCK to RTCZ are all of Cloud's weapons and can also be replaced in this way, just bear in mind that RTCZ, the Ultima Weapon, applies some hard-coded shading effects to represent its HP property; changing the damage formula in the Kernel.bin will not disable this shading filter.
Sorry to bother you again, but regarding the model change, I've got a few further questions (managed to replace the Murasame model with the Masamune).
I'm currently using a sort of "submod" for New Threat 2.0, which features a bunch of kernel edits, and I'd like the battle.lgp file to be foldered in there. Though it doesn't seem to work without some tinkering I'm unaware of.
I've tried adding the file via 2 folder structures. First I've tried battle/battle.lgp, second I've tried data/battle/battle.lgp. Since these two didn't work, I've made a backup of the vanilla file and added my modified file into the game folder.
I assume I would need to edit the mod.xml file somehow, to have the submod's file overwrite the vanilla one.
Also, I wonder if it's possible to add another playable character that you could recruit. I though of trying to have one of the Sephiroth clones join the roster (which would functionally pretty much just be Sephiroth) at about the end of the second disc, with custom level curve, stats, etc... I know there are a few mods (such as NT) that let you have Jesse as temporary party character (probably via some hacky solution, which ofc wouldn't apply for my use case, since Sephiroth has a field model, full-fledged in-battle model with all necessary animations, etc).
Sorry again for asking all of this basic stuff, I've just hit a dead end with the search function on this forum. There might be some sort of comprehensive tutorials for modding the game, but for the life of me, I can't find much.