I played Illusion of Gaia too, though I enjoyed its sequel, Terranigma more. I remember having a similar response to developments to Terranigma, as it had many similar elements. You spend the entire game doing the bidding of your elder by rebuilding the world from a barren wasteland, from the continents, the plantlife, the weather and atmosphere, animals, and eventually resurrecting humanity.
Often bringing about these changes would bring negative changes as well as positive, starting with minor things such as the loss of ability to converse with plants as you introduce more complex species to the world. As the world begins to follow a capitalist economy, you'll help aspiring artists such as Henri Matisse develop their talents, only to see them become burnt out, regretting that they've lost their passion as their success led them to chase money. When you help develop the human towns to develop, you'll see them turn to entertaining themselves by capturing and imprisoning the animal buddies you spent the early game helping, keeping them in zoos or trading them on the black market. Later you set about advancing human civilisation by finding and assisting great people with their labors, helping Alexander Bell to invent the telephone, Thomas Edison to invent the light bulb, Wilbur Wright to invent the aeroplane, and voting for political parties. But then another genius scientist you help has his own idea for human advancement which includes a devastating eugenics plan, and you'll see the effects of the militarisation of technological advancement.
Throughout the game there's this sense as you continue to develop the world that every advance to humanity is in some way detrimental. Other plot developments have the protagonist question whether doing the bidding of your elder unquestioningly was the right decision. The ending is bittersweet; the protagonist saves the world and humanity, but in doing so has lost his childhood friend, his hometown, and everyone who lived there. The people he's saved don't even know they've been saved, and they'll never know of the existence of their saviour. It's an ending left to interpretation with some questions left unanswered, but regardless of the answer you come to it's a tragic one that left an impression on me.