After reading this, I wanted to share my experiences because I think there might be something going on that some of you weren't aware of, or maybe its just specific to my computer. I don't know.
The Mod "Miscellaneous - Red Werewolf" caused a lot of problems for me a took a bit of testing to sort out.
I started with the load order you recommend and set Red Werewolf and Gameplay both to Vanilla and was getting the boss fights starting in the Shinra Tower.
Then, I reinstalled everything including a thorough cleaning of my registry... set everything up... same problem.
Well, at this point.. time to troubleshoot. I started with loading only the music mod. Boss fights were correct. As I activated one mod at a time, Red Werewolf was the the problem child.
Here is what I have found. Running the game in the "standard" difficulty with Red Werewolf doesn't work. I'm not sure if the 'Hardcore" mod was working right... I got a boss fight with a giant white bird. With Red Werewolf deactivated I can play the "normal" game just fine. With Red Werewolf, I run the "Reasonable Difficulty" mod and everything seems perfect so far. I have since played around with load order to get my desired graphical affect.
Current Load order: [Gameplay - Difficulty and Story], [Misc - CHaOS], [Battle Models-Weapons], [Battle Models-Characters], [Field Models-Characters,Enemies, and Objects], [Battle Models - Enemies], [World Models - Characters,Enemies, and Vehicles], [Menu-Backgrounds and Avatars], [Misc - Red Werewolf], [Animations], [Media - Music and Sound], [Battle Textures], [Menu Overhaul], [all the Minigames mods], [World Textures], [Spell Textures], [Field Textures], [Media - Movies]
Current System: AMD Phenom II x4 B55@4GHz, 8gig Ram, GTX 760, Windows 8.1
Started with Final Fantasy VII Steam Version as my base.
I tried the "Hardcore" difficulty mod and I'm not sure If I getting the right boss fights ore not. Giant Bird for the first fight in Shinra Building. Haven't tried any of the other "difficulty mods."