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well my take on tifa is that although she to serve a dynamic role in most group based orientations she seems to be so much more demure in more one on one personal situations. she seemed so full of spunk in her childhood years, maybe it was the loss of her mother maybe it was the loss of neilbhiem and the secrets she had to keep that drove her to grow up so fast that she had abandoned the spunky, innocent days of her childhood were long cast aside out of necessity. it makes sense that she would feel flustered and completely out done by a bold, older, more important girl who has nothing to hide from, and no secrets to keep from cloud. the scares of the past left Cloud's shell shocked left him with a shattered identity in which he tried to replace his identity with that of a dead friend, one whom arith had once loved. Tifa traumatized from the past herself managed to hang onto herself, but had to walk very careful road with cloud who somehow seemed different with warped perspectives on what had transpired. Tifa always struck me as a character who was far too selfless, she seemed to hold herself back for cloud's sake as much as her own, and as for her relation to Arith, well she obviously felt inferior to out of her more confident and more mature personality.
As for Tifa's appearance, I'd simply have to say that tifa is just one of those naturally sexy women and she has noway to hide it.