Why am i unable to select Cid on final fantasy 7 even though i unlocked him in my party

At certain points in the game, there are certain characters you must use for that part, and sometimes certain characters are unable to be used. It sounds like you are at one of those parts, and the game is restricting you from using Cid (most likely he will involve himself during a cutscene) while your main party does something. Continue with the plot, you'll eventually be able to play as him.