So, I've mulled over the ending of FFVII some, and I think everyone (except Nanaki) does die in the end.
The main evidence to the contrary is the existence of various sequels and spinoff for FFVII, but consider that all of them consistently depict Aerith as a saintly healer girl and Tifa as a boisterous punchy girl, contrary to their original characterization. From there, it's simple to deduct that those works actually take place in an alternative timeline where Aerith and Tifa's personalities were switched, which caused various butterflies (most likely focused on the contents of Aerith's Prayer) that resulted in everyone surviving.
The original cast you see in the game, though? Dead as a doorknob.
In conclusion, Aerith being a gremlin caused the apocalypse, as expected.