Tifa is Squall's childhood friend from Nibelheim. A very strong woman, she uses her fists and knuckles only in battle. She has suffered at the hands of Sephiroth twice. First when Sephiroth burned Nibelheim and killed her father, and then when he told her that Cloud was but a character created by her own memories. Not accounting Cloud, this might be Tifa's inspiration in going up against Sephiroth.
How'd she end up no.2?  She's tough as a rock. If you went up one on one against her, she'd beat you up like yesterday's dinner. Pound for pound, she is by far the most strongest woman in any Final Fantasy to date. Even so, it must be said that her exaggerated bust is definitely one of her major flaws, possibly why she didn't stand a chance against the number 1 gals. Ooops...