I finally found a little time to get the parts swapped today, and it went very well thanks to the advice from the Moen phone rep. Below is a complete set of directions, in case someone else finds this article in a web search. I do NOT recommend this kind of repair for a newbie, even with clear directions. It is better left to someone with moderate plumbing experience or strong mechanical skills.
As mentioned above, it is not possible to change to cartridge with the chrome-colored part above it in place. I'll call it a spout retaining collar, since it threads onto the body of the faucet and holds the spout in place. It is actually made of plastic, but it was badly frozen from the water that leaked from both of the spout seals. Using the channel locks was a bad idea, now that I know it is plastic. Don't attempt this unless a backup collar is handy!
I decided to try the vinegar trick today, just to see if it works. If not, I was going to put the pliers directly on the collar and force it off, even if it broke. I had a backup ready, thanks to Moen sending another one, just in case things didn't go well.
I removed the handle and poured vinegar directly into the cavity under it, and I repeated this two more times as it slowly drained through the gap between the spout and the retaining collar. After fifteen minutes, I attempted to remove it with a bare hand. I was shocked that it budged so easily after the previous attempt with channel locks had no effect.
The cartridge retaining nut was also no problem. I didn't have to use a screwdriver through the faucet socket. No water had leaked at this point, so it was just as easy to remove.
The spout was stubborn, and required a lot of back and forth motion while pulling upwards really hard. It had quite a bit of scale on the inside, which is what was causing water to seep above and below it.
Since the vinegar worked so well for the collar, I decided to use it with a green (soft) scouring pad to clean the scale buildup on the entire faucet, especially both of the spout seal mating surfaces (inside of spout) and grooves (on the body). The faucet now has the original mirror finish, and the mating surfaces are extremely smooth again. Cleaning these o-ring areas is VERY important to keep the new seals intact and to slide the spout onto the body. A lot of pressure is required to clean the inside of the spout properly.
I sprayed everything with a water bottle to remove the debris and vinegar, dried everything really well, and used all of the plumber's grease supplied in the seal kit to ensure everything would slide together and easily move back and forth once assembled. I dabbed all four seals (two o-rings on the body and two hard plastic rings above and below the spout) after the were installed, and the spout was mush easier to reinstall than it was to remove.
The cartridge is a no-brainer on this model, just look for the two raised spots on the bottom that align with two holes inside the floor of the body. I also lubed the retaining nut and collar to ensure easier removal next time. The handle and spout now glide like it is a brand new faucet, and the entire repair took about thirty minutes - about ten to fix it and twenty to clean it properly.