What was said was cg cutscenes, and Final Fantasy VII introduced gaming to it. 

No it wasn't and games were laying the groundwork for FF VII long before FF VII was a thing. 

This is basically the moment that changed the game industry forever as far as from 1985 onwards is concerned.

If N64 was CD-based, Final Fantasy VII and Dragon Quest VII would've been N64 exclusive and N64 would've IMO outsold the NES due to the industry becoming larger and Playstation would've fizzled out without the overwhelming majority support from 3rd parties.

Against Mario 64, Final Fantasy VII, Zelda: OoT, GoldenEye, Dragon Quest, Banjo-Kazooie, Star Wars exclusives, and other third party games like Resident Evil 1/2/3, Street Fighter, etc. there's no way Sony could've touched Nintendo that gen, Nintendo's 1st party was on top of their game, but Rare was also killing it, and then Squaresoft was also doing incredible. Nothing could stand against that tsunami.

IMO I actually believe if this is how it unfolded there wouldn't have been a Playstation 2, I think Nintendo if they played their cards right would've beaten them that badly. I think effectively you would have this:

N64 Exclusive: Super Mario 64, GoldenEye, Final Fantasy VII-IX, Zelda: OoT, Dragon Quest VII, Zelda: Ocarina of Time, Perfect Dark, Banjo-Kazooie, Star Wars games, NBA Courtside ft. Kobe Bryant, Ken Griffey Jr. MLB, Final Fantasy Tactics, Bushido Blade, Pokemon Stadium games. 

Playstation Exclusive: Crash Bandicoot, Gran Turismo, Spyro the Dragon, Parappa The Rapper, NFL GameDay Jumping Flash, Battle Arena Toshinden. 

Multiplat: Tomb Raider, Resident Evil, Metal Gear Solid, Tekken, Ridge Racer, Tony Hawk Pro Skater, Silent Hill, Castlevania, Street Fighter. 

IMO developers would not make Playstation exclusives because the sway of the N64 would be too large to ignore so deals that Sony enjoyed like Tomb Raider exclusivitiy from TR2 onwards and Metal Gear Solid exclusivity and all that IMO don't happen. 

What was said is this: "Most notably CG cutscenes (the CG cutscenes you did your worse to not understand what they are and needed me to explain) being used to help tell the story. In a game...something on this scale hadn't been done before."

You may want to rewrite history and count FF VII out for whatever silly reason. But no matter your objections, FF VII did indeed have a big impact on the industry and changed the way stories are told in games. 

Umm... How was Gamecube's disc drive more proprietary than that of Dreamcast, PS2 and Xbox had? And how did it hurt Gamecube? What do you think was the problem with with Gamecube's console design and why do you think the bad design PS2 had did not hurt PS2, if GC design hurt GC?

I don't see power being a problem with Wii U.

The gamecube disks were designed to be read ina diffferent direction than the DVDs used for other systems.  That;s why they were 'more propietary.'  It was a way of preventing them from being burned and copied.  What really hurt them, though, was that the small disks could only hold 1.5 gigs of data, while the PS2 and Xbox disks could hold 3x that amount.  It meant that again, developers were discouraged from working harder to fit larger games like GTA onto the small disks.   Many third party games that skipped the gamecube would have come to the system if it had used 4.5 gig disks instead.

The drive was hardwarewise a standard DVD as far as I'm concerned, only the firmware was different to have the disc read from outside to inside - even the disc was spinning in a standard direction. Physically the discs were standard mini-DVD. If you'd had the codecs, it would've played standard mini-DVD's. All of the consoles had the same things being proprietary, which are the codecs and DRM used for the software (for obvious reasons).

Yes, the disc was smaller in capasity, but it doesn't make the drive any less standard.