Is there official word that they're going to do this? I assumed from the video that they are going to keep the turn based gameplay.
Well, from developer interviews, it seems like the official word is that it's going to be somewhat more action based than the original was, but they're maintaining that the turn based elements aren't being completely cut out, whatever that means.
I do kind of understand the multiple release thing, because this time rather than throwing together a bunch of pre-rendered backgrounds, they have to flesh out the whole world, meaning that they have to take those backgrounds and not only remake them to be more fleshed out and detailed, but they have to build them so that you can view the scene from all angles. This alone can easily multiply the amount of work that needs to be done, because you not only have to render what's in the scene, but you have to render things in the distance that you maybe can't go to. Landscapes, buildings in the distance, things like that.
At the same time, though, I'm a little worried that they're going to try to change the game too much. They've said already that they're going to be expanding on the content in the game, and I don't know how well that's going to work out. So far their attitude has been that if you liked the original game's mechanics and story better, that the modern re-release of the original FFVII should be sufficient, and I don't know if that's the right attitude to have here.
We'll have to wait and see what happens though.