Not bad, but could be improved
The animation is decent and the art style shows promise, especially given that it's created within Flash which can prove to be difficult for artists without as much talent.
My only real thing that kept bugging me about this is the fact that the dialogue was poorly done. I'm not talking about the voice recording quality or the voice acting (although I would recommend that in the future you recruit people in SBB via the Voice Actors club to cover some of these roles, because the same person doing all voices is tricky); instead, it's the way the dialogue was written. You had an interesting idea going on, but the dialogue, including the narration, sounded very stereotypical and comic-book-ish, which is a big turnoff to me personally (mostly when Hollywood does it, though). Even if the story is within a fantasy genre, dialogue should be written the way people would say it to each other.
To use an example, if Nanaki was attacked by a remnant of Sephiroth, you don't need 3 characters talking about it like that. Instead, improvise and show the attack happening, but leave the "remnant" idea to mystery for the characters to have to find out.
Two useful keys to screenwriting that I've found by analyzing the work of others is: 1) when it comes to dialogue, pretend you are the character speaking in that setting, and write what you would normally say if you were that kind of person in that kind of setting, and 2) when it comes to knowing what to and what not to show in your production, imagine yourself as a viewer going to the movies to see your film, and ask yourself all throughout your development: "If I was watching my own film as just an average viewer, what would -I- want to see? What would I want to see in this scene? What would I want to see overall?"
Just some food for thought. I usually don't review flashes because many flash artists can take an ounce of criticism, but the reason I felt compelled to review yours is because I can see a lot of potential that just needs some honing.
Good luck in your future endeavors.