Unfortunate yes, and yes all SOLDIER members were infused with mako, but not Jenova cells. Hojo thought Zack and Cloud were both powerful for either having killed Sephiroth or at least not being killed by him, so he experimented on them with Jenova cells and massive amounts of mako for two years.
And if it was uncertainty vs knowing that he was killed by 5 people with machine guns, I'd personally rather not know what happened.
And I don't recall that punching scene...but if it was during the black materia part, that was when Sephiroth was morphing his body to look like the other characters so he could manipulate them into giving him the black materia, so it could either have been Cloud under Sephiroth's control, or just Sephiroth himself disguised as Cloud.
