LogFAQs > #980165115

So, what they were supposedly going for was to put you in Cloud's shoes in a sort of extreme "denial" over a loved one. So much so that he believes he saved her (he might have but we don't know the truth) and we as the player are robbed of the burial because he blocked it out. The question remains if the Aerith he was talking to was real in some way or not.

Execution is a different story, but that's the angle they were going for this time, the devs confirmed it in the Ultimania.