Hehehehehehe hehehehehehehe ^^

I think it's supposed to be some sort of fantasy sex club, with YMCA moustached bulky guys to boot. I really don't get the context of it in the game, but it makes for good lulz ^^

Like Miss Valentine says, it's a "lols" thing really.

To call it something, I guess a brothel plus love hotel is as close as it gets; the girls in bee outfits are the workers there, and the implied gay body builders, I don't really know...Maybe they go there and pick up confused blond guys (like Cloud *remembers gang up scene* XD)

If you look into each peep hole, there are some weird scenarios, and not all of them involve the Bee Girls, so people probably come themselves to have relations.

Again, there wasn't much thought in it, so it's more of a funny aspect of the game while it's in the slums setting.

Definently a brothel. XD

There is the part where two girls get Cloud in one of the rooms, the screen goes back and then suddenly "HP and MP restored" flashes on the screen XD.

In one of the rooms you can look into, Reeves parents are inside. O.o You can even see a figure of Cait Sith dancing around.

Definitely one of the more memorable places in FF7.

I don't think it's just a brothel though, cause that'd imply it's plainly about sex - it's more of a fetish club where people can pay to be decadent and slightly naughty in a controlled establishment, away from prying (and judging) eyes.
With the option of getting laid. ;]

I never really understood what President Shinra was up to in one of the rooms though...

Well no, not obvious to me anyway.

He's got a group of people in there and they're reciting a strange ritual, with some allusions to Sephiroth in one of the passages. It just didn't make much sense to me at the time.