Welcome!
I would not worry about spots that I can see in the photos. What I WOULD worry about is the musty smell. Personally, I would never try to grow a Cattleya in sphagnum. I suspect that roots are in poor condition due to old and inappropriate medium.
In general, it is best to wait to repot until new roots are visible. But in this case, I would lhink about repotting now. When you do, gently clean off old medium, rinse well under the sink. Don't try to clean off all the old stuff because that would damage roots. Don't cut any roots even if they look bad - again, a good rinse under running water , then pot it up in fresh medium (I use bark, other people use inorganic media) . Even a bad root can hydrate the plant, and also help hold it in place firmly in the new medium (very important). Then you can water normally - it doesn't have to go completely dry (and probably shouldn't) if it has adequate air around the roots, which the fresh medium will provide.
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