The way I took it was the events of Advent Children happened after FFVII. Cloud in his battle with Sephiroth in FFVII showed him in "top form". Tifa makes reference that they had all been stronger back in the day when she's on the airship watching Cloud fight Kadaj/Sephiroth. Plus in the earlier fights of Advent Children, Cloud has been substantially weakened by Geostigma. But if you remember, he is bathed in the water of the lifeforce which is why, although a struggle, he can defeat Kadaj/Sephiroth in the end of the movie. God, I'm such a Final Fantasy Fanboy. I really hate myself right now. I hope that made sense. If someone disagrees, pleased correct me. Thanks.