Ultimate Weapon will fly around these so you just have to fly around these areas to find it.
To attack it physically during an air battle you'll need a long range weapon or long range materia. When Ultimate Weapon is flying around, you need to ram it a few times before it will finally stops over some spot ramming it then will start a fight the type of the fight will depend on location. You'll need to ram it with Highwind to get it moving. Ultima Weapon will appear hovering in a crater. From Ultimate Weapon you can win Clouds ultimate weapon, called 'Ultima Weapon', a reference to the 'Ultima' spell from previous Final Fantasy games.
Ultimate Weapon is the boss you first fight in Mideel, and can be fought for real toward the end of CD2, after Diamond Weapon is destroyed.