Mangekyo has three abilities (though we've only seen two so far: Tsukiyomi(genjutsu) and Amaterasu(the black flame ninjutsu). People have speculated that the last one will be Susano-o). And as Sasuke pointed out during his fight with Deidara, he can see the 'color' of chakra so he pretty much knows when a genjutsu is in use. *sigh* I don't know~...
Yeah, but only if they actually meet. And then the clan doesn't like him for leaving, and they would hate the fact that their 'prodigy' was hanging out with him. Probably try to keep them apart.
You mean like with Hinata and Naruto? I can so see Cloud coming to watch Team 7's training and Kakashi's trying to look responsible, and Team 7's thinking, "What the heck was wrong with him?"
Aerith, Zack and Cloud would be genin teammates, don't you think? With Sephiroth(or maybe Vincent or Cid) as their sensei? And, Aerith being related to the Shodaime and Tsunade somehow? Hmmm...