A remake of FF7 would be cool but i think the original still holds up well today saying that though if they could produce graphics that closely resemble Advent Children i think it would be awesome to say the least.
12 had a decent system, but when it comes down to it, it's just about the same as all the others due to the gambit system being more or less useless. If anything, the only good things about 12's battle system upgrade was:
1. No more stupid random battles.
2. Characters circle and hit the enemies realisticly (unless their flying).
3. The gambit system lets you just tell your teammates to just keep using attack while you worry about the character you currently have selected (also being able to jump in and stop charging moves to change them to something else).
Quite personally, if they did change the system to mimick 12, I wouldn't mind as long as the whole Materia system stays the same.
They should definitely do it. Look at Capcom with Megaman. They remade it with newer graphic, although I can't say I liked it. But at least it was possible that company can re-release a game with updated graphics, yet stay true to its original core.