Ok, after about 15 tries last night, I beat Sephiroth. The Trinity Limit was key for me (along with a steady supply of Elixirs). I agree that his defense sucks, but his offense is staggering. One combo and you're hurtin'. So now I have the Ultima keyblade and Fenrir. I stuck Fenrir on Final Form. That is some impressive damage. I've also been able to synthesize Save the Queen+ and Save the King+, so my team deals out a healthy amount of damage.