As for why she was in there in the first place, I am pretty sure it was there to provide energy for the monsters.
More like to provide cells for the monsters I'd think...
Just for the sake of adding another spin to this conversation, how about this?.....
Sephiroth, in and of himself, is only human. Before anyone attacks that statement, he was infused with Jenova cells in utero by "daddy dearest" Hojo. Jenova was responsible for his unbeatability in battle, his super-human ability to weild the Masamune.
Sephiroth was thrown into the Lifestream 5 years ago. We all know this is the last that's seen of him until the Northern Crater. Sephiroth takes the head of Jenova, and by the end of it all, is thrown into the Lifestream by Cloud, still in posestion of the head of Jenova.
Jenova can't be destroyed so easily, hence the Reunion, the cells will find their way back together.
Now, what if, because of the high concentration of Jenova, Sephiroth's body merged with Jenova's head, thus beginning the Reunion. At this point, Sephiroth is dead, mentally at least. His body becomes nothing more than a primary host for Jenova, a point to which all other's will be drawn for the Reunion.
Cloud: Jenova's cells... ...hmm. So that's what this is all about. The Jenova
Reunion...
Tifa: Not Sephiroth!? You mean all this time it wasn't Sephiroth we've been
after?
At this point Cloud realizes that it was the body of Jenova, not Sephiroth, that they'd been chasing around the world. This is what trigger's Cloud's breakdown, if it wasn't Sephiroth that they were chasing, then what happened to him after the Nibelheim incident 5 yrs ago, the last time he was seen?
Why does Jenova take Sephiroth's form and not another?
Cloud: He's here. The real Sephiroth is just beyond here. It's both incredibly wicked and cruel... But it's releasing a powerfully strong will from deep within this planet's wound.
Sephiroth, or at least his body, acting as the host of Jenova's central being (the head), told the body what form to take, and what to do along the way. There are 3 possible reasons why Sephiroth's form was used:
One is simply the intimidation factor, e.g. noone will try to obstruct a black-caped man with a very mean-looking sword while he's passing through town.
Two is that Sephiroth has been dead for 5 years, so the odds of him being recognized by the average person are slim, while others will know him right away and be afraid, i.e. Cloud, President Shinra, and anyone else involved in the grand scheme.
And three is that it will entice Cloud to follow, as Cloud would make a valuable asset to the Reunion. Remember, Cloud was the only "successful" subject as a Sephiroth "clone" which is shown by the fact that he pursued what he thought to be Sephiroth all the way to the Northern Crater.
In the end, Jenova was the grand manipulator of it all, Sephiroth the host of a grander being, and Cloud the sometimes-unknowing, sometimes-unwilling puppet, and Tifa the key to unlock Cloud's ability to overcome what would have otherwise overtaken him entirely.