Interesting, so it looks like you have a disc bulge (duh lol), but imho the tingling and numbness is being caused by the foramina stenosis (narrowing of the spinal canal) with myleopathy ("nerve pinching", numbness). No foramina stenosis, narrowing around nerve root and spinal canal. No spondylolisthesis backward or forward slipping on lower vertebrae bc of interarticularis. No encroachment in VTS. You're MRI looks pretty "good."
Treatment wise there's nothing that can be done in PT to "unnarrow" the canal, really what we do is stretch the muscles, try to increase the ROM, and work on your functional day to day level. I don't see you mention any neck movement limitations or problems with daily activities having to do with cervical movement, just the complaints of the nerve compression through dermatone C5 and C6. I would recommend you talk to your therapist and doctor and have them come up with a treatment plan based on 2 or so months, check the results, and then decide if surgery is a feasible option. Each clinic is different but generally we discontinue cervical traction if it isn't working after 6 treatments. Surgery is always a last option..
I'm really not much of a fan of cervical/lumbar PT patients, it just seems like it's such a mixed bag of results. Our boss has another clinic in a doctors office that does mostly spinal surgeries, fusions, cervical etc I think it would drive me nuts. If you did get surgery they will probably clean those bone spurs out while they're in there.
Again take what I say with a grain of salt, I'm not your pcp, neurosurgeon or PT, anything they say should supercede what anyone on a board thinks. The unfortunate part about healthcare is that we providers really don't have the time to sit down and talk things out like we would with our patients, and sometimes I'd really like to but can't...