Susan,
There's no problem cutting a dried spike, even the bit above the keiki. Just take care not to injure the plant in the process (what I have done...
) From my understanding and experience, Phals usually do well in a pot that's diameter is approximately a third to a half of the leaf span. So, if your leaf span is, say 30 cm, then a pot of 10 to 15 cm should do nicely. They tend to like to "topple" out of pots, so I have several of mine in shorter, wider pots (more like a bulb-type pot or tray). Just depends on what pot you find appealing, I suppose. These are just rules of thumb, though.
I'll be interested to hear how it all turns out!
Good growing to you,