Until FFVII was announced, Saturn was actually outselling PS1 in Japan.  I kinda wonder, if Square had gone with Sega instead, how things might've turned out...

Are you sure about that?  From what I've read, the Playstation outsold the Saturn the first month the PSX was out, as opposed to the four month lead the Saturn had.

Maybe those are US-only sales. 

I can't imagine Square on a Sega system.  I always had the feeling that Final Fantasy was in opposition to Phantasy Star and, maybe, the Shining series.

Man, the 16-bit generation really was the best thing ever...

No, that was US.  In Japan they launched a week or so apart, and Saturn sold much better upfront (thanks to Virtua Fighter, which was HUGE at the time).