Cloud has, always, been capable of getting exp. and job levels (both in the PSX version and in War of the Lions). Mostly, your friend was scared that you couldn't use the Limit skills with any other weapon, aside from the already-mentioned Materia Blade (which is pretty much a forced acquisition, not to speak a bit weaker than most weapons)

I'd also like to point out that Cloud has some degree of skill in other classes, mostly White Mage, Black Mage, Time Mage and Summoner. You might be capable of giving him some decent magic ability, a high-MP hat (equipment doesn't give you defense but rather raises your HP and MP directly, just so you know), and raise his levels with the use of those abilities.

Also, in case of job levels (and this applies to everyone), you can place him with other special characters (such as Beowulf, Reis, Agrias, Mustadio, Orlandeau, and in the WotL's case Luso and Balthier) and he'll get some JP from them, so as long as they are on their special classes. This also works if you have a Squire with you, or if you have Ramza in his Squire job. The amount of JP gained is roughly equivalent to 10% of the JP the character originally got (so if, say, Ramza as Squire got 40 JP, Cloud as Soldier would get 4 JP; note that it only considers the original JP, and it can't be heightened with JP Boost) This also works for other classes, so if you don't want to raise a specific class but need an ability of theirs (such as the Time Mage's Swiftness/Short Charge ability), you should get someone of the same class and use it.