FF6 vs FF7, the one I like better between them is usually the last one I played. I think for me though, the series really peaked with Final Fantasy 8; although sometimes I shift my opinion to liking FF6 better (for example) because I am currently playing it, usually I shift back to liking FF8 more shortly after. I do think all of the Final Fantasy games were great though, but recently I have been a bigger fan of Dragon Quest than Final Fantasy; this was also true during the NES days, but after Dragon Quest 4, I didn't even play Dragon Quest again until DQ8 on PS2 (although I did buy DQ7 when it came out on PSX, and just have yet to actually play it =P).

Either way, Final Fantasy 7 is a great game, and I think people nit-pick it just to support their long-standing bias that Final Fantasy belongs on Nintendo systems - or that JRPGs are "too emo" for them (although from the people I know who complain about things being too emo, I call Bull**** on that, I knew what kind of twisted emotional mess they were when I knew them in High School =P); and therefore needlessly miss out (or have compromised enjoyment) on some of the alltime best games.

Im already at cosmos canyon with cloud level 27, aerith 27 and tifa 26 (my main team)

Wow, you've levelled quite nicely. You're going to have no trouble in the last stretch of CD1. 

Also, have you been using Limit Breaks often? Using Limit Breaks from the current level plateau is the way to unlock the second Limit Break of that level. For example, Cloud's level 1 Limit Break consists of Braver initally, but after using Braver for 4/5 times, you unlock Cross-Slash. To unlock further levels, you have to defeat a certain number of enemies with that same character.

This is useful for certain Limit Breaks, like Cloud's level 3 Meteorain, adding more roulette slots for Tifa's Limit Breaks, etc.

The limit breaks of all three of them are level 2

That's good, Climhazzard is one of my favourite Limit Breaks for that part of the game. My suggestion is that you try to obtain Meteorain for Cloud until the end of CD1. Makes the final boss battles in this CD somewhat easier.

The music at Cosmo Canyon is brilliant. One of my favourite pieces in the series.

Looks like I ruined my chance to recruit Yuffie too

Did you found her and then didn't choose the right dialog lines?

You'll encounter her multiple times as long as you fight in forrested areas so I wouldn't worry too much. You can always try again.

Also, have you got manip materia yet?

If you have, go to the beaches around Gongaga. You'll encounter a group of 3 weird squid like creatures. Manipulate them and have them cast "Big Guard" on your party with at least one of your party equipped with enemy skill. Once you have Big Guard bosses are a lot easier. It basically gives you Barrier, MBarrier and Haste for relatively little MP. Most useful enemy skill in the game.

Caith Sith came with that materia, I should try it