It has been a really long time since i have played FFVII but if i remember right when you are starting out as cloud and are fighting along side Sephiroth he does an insane amount of damage to the creatures that are attacking the town with his sword. his regular attacks do alot of damage and i dont remember him getting hit by the creatures. so what i am trying to say is that while bowser maybe able to jump high and cover long distances does it really matter, because if you think about it if right before bowser lands Sephiroth jumps wouldnt he jump over the shock wave? also i have not read the rules for this melee but if materia is allowed couldnt Sephiroth just have Phinox equiped? i remember that i had it equip on Cloud along with another materia and it auto cast when i died and brought me back to life.

Or on a side note what if sephiroth could some how escape from the arean and go kill Princess Peach in the same manner that he kills Areis? then what would bowser do he would probably have a mental break down similar to Clouds and the fight would be over and there would be no more Mario games because bowser would have no purpose for life.