Disclaimer: SquareEnix owns the recognisable bits.
Aerith.
Loss: the state of being deprived of or of being without something that one has had.
When she saw the butterfly she'd felt… something slip…
Something she'd buried so deeply…
Hidden so tightly within herself.
She'd felt it go…
Felt it loosen…
And relax.
She had smiled.
A real smile…
A genuinely happy smile.
For the first time in years, she felt at peace.
That little bit of despair…
Of loss…
It was gone.
So, um, cos it's not so obvious, I'll explain that the reason everyone has been getting so angsty and depressed is because of the Heartless and the attempts to open Kingdom Hearts, which has affect all the characters, weighing them down. This chapter and 'Smile' are set when Sora closes Kingdom Hearts and generally saves the day, so the heavy axiety caused by the Heartless etc has been lifted. I hope that isn't too confusing. The butterfly is a reference to the credits of the game (KHII)