I'm no dev, but both versions of Omnislash you're describing would be considered physical blows. In Advent Children, if you look closely, he's not using "energy blades", he's using the separated pieces of his Fusion Sword and attacking with them individually. The individual blades apparently just glow during the technique. As for the victims never getting "cut to bits"... well, the Final Fantasy series has never really been known for its realism when depicting injuries or hyper-violence.