Yes, the "stem" is the part of the Phal (this is true of other 'monopodial' orchids as well) that the leaves (& roots) came/grew from, & are still attached to... & at the top, still grows new leaves out of, which is referred to as the "crown"
I have heard a few experts talk about this, (also in reference to re-potting) so I will take a stab at what King was referring to about the 'portion of dead stem'... It is the older part, @ the bottom, where the bases of the oldest (bottom-most) leaves r joined "fused" (if u will).... it almost forms a cone-like shape at the bottom of all the leaves, & will have roots coming out of this place too, which can actually make the cone-like shape, not so cone-like anymore.
Now, @ the very base, the 'pointy'-end of the "cone", (usually below most of the roots as well) there is dead tissue (kind of like a "cap" of scar tissue) this
protects the
living tissue (further up the "stem", from which the leaves & roots are attached) from sitting in an area that is more or less, constantly moist, so it won't rot as easily (because it's already dead).
So, when you repot, you do not want any living part of the stem covered with media, as it could easily be fatal, the roots will be fine out of the media, this is how they have adapted to grow anyways... they are epiphytes after all, and the new roots, just head down toward the damp media
I've heard some say to leave the stem of Phals out of the mix, with the "cap" of dead tissue sitting on the media. (I basically follow this, some are potted as described above, but I have some Phals that just do fine with a
little bit of the living part covered, but, the media is loose, and
never,
ever constantly moist, much less wet.)
*King, please feel free to correct me if I'm wrong.
Or if I haven't explained it well enough (as u most likely have a better (ie, simpler) explanation)... Always open to other opinions, as I am by no means an expert.