Keep playing the MSQ for answers.

And no, he isn't related to Midgard, but to Norse Mythology where Midgardsomr is the great serpent. (FF VII drew a lot from Norse Mythology, Midgard is the realm of humans, Niflheim the underworld, for example.)

There are Magitek soldiers bc his corpse is slung around an old Garlean vessel, and the Garleans try to get some supplies/materials from there.