There's actually three iterations of Medina. The town square is the best place to see them in action.
When you first get back from 2300 AD via the End Of Time, the Mystics (fuck the DS and its "fiends") can be seen giving homage to a statue of Magus (who apparently fought a war against humans four hundred years ago; all we've seen of him so far in the story is a couple of mentions and a shrine in the Cathedral) - and yes, (almost) everybody hates you and charges too much and someone tries to kill you in the shop for good measure.
Beat up Magus though, and the statue changes - the Mystics now worship Ozzie instead (and one of his line is Mayor!). Which is not only funny, but a hint that defeating Ozzie in Magus' castle wasn't the end of him.
Once you get control of the Epoch at the end, go to 600 AD, fly to what's now Ozzie's fort, and relocate to 1000 AD, and guess where you end up? Medina, clearly founded and developed by Ozzie and his descendants. Finishing the Great Ozzie changes Medina again; there's no statue at all, Ozzie VIII is now just some lackey, and the Mystics have no beef with anyone. The only Mystics in 1000 AD who never hated you - the first ones you met falling out of the cupboard, who are aware of the war in the past but totally over it - are now likely the ones in charge.
It's all these touches that help make the game as wonderful as it is. (And yeah, the thing with Lucca's mother is one of the only two times I've ever cried at a video game - and Aeris wasn't the other one.)