Yeah, Sephiroth was a secret battle in both games and probably the hardest in each (save for some of the ridiculous stuff in the Japanese Final Mix, with Roxas and whatnot.)
In which game he was more difficult is a matter of opinion, but I think the first, because he was cheaper. It took figuring out a very specific attack pattern to even touch him, and then you needed to wail on him for a good two minutes (depending on your level) to make his health bar even start to dip (and he had five of them, six including the invisible one.) By the end of the battle he had attacks that were beyond impossible to block or dodge, so you just had to frantically heal and hope to sneak in a chip attack now and then.
In the second game he had FIFTEEN health bars, but due to reaction commands and Sora's generally upgraded skills, it was actually an easier fight, even on the Expert difficulty. There was still a good degree of trial and error, and most of his attacks were basically insta-kills (the perks that let you hang on to a sliver of life no matter what were beyond essential), but with the right skills you could knock the silver-haired, silver-tongued punk into the air and wail on him for a good dozen or so hits, then repeat. It was actually possible to beat him without even getting touched, but it was much easier to let him launch you (which did very little damage), then strike back and pound away.
Of course, both battles were much easier if you had the patience (and boredom) to grind Sora into the 80s level-wise.