Over 1000 damage in those stages of the game isn't normal. Some of those mods might also edit character stats or the effects of certain items. But even so, the base FF VII is incredibly easy. You can beat it with basic attacks and barely even heal during combat. If you want a more moderate challenge, I recommend installing a mod that affects gameplay. New Threat is the most popular and highly recommended, offering a balanced challenge. If you want an even greater challenge, there's gjoerulv's "Hardcore." You could also try Tifarith. I haven't tried it, but its patch notes look interesting.