Betsy, those are scale insects on the edge of the leaf. They suck the juices out of the leaf, but I don't know if they could be responsible for the roots shriveling up. Treat the plant with a dormant oil spray (and keep it out of the sun after you do this) to suffocate those little beggars. Then wash the plant off with a mild soapy water spray followed by a rinse of clean water. Make sure the oil spray gets into all the nooks and crannies, and then keep your eyes open for any new crawlies in the next few weeks.
On the watering, those aerial roots really need either a higher humidity situation or you should try spraying the plant with a mist of water at least once a day. (keep it where you'll just spritz it when you walk by with a spray bottle) Orchids are epiphytes that feed/water themselves through their leaves and stems as much as from the roots, so just dunking the pot in water may not be enough as the air is dry in the springtime, and getting warmer. You can fertilize it with the spray bottle, too.
Phals like a cool-ish situation - temps not much over 85 will keep them happy, so where you are, if it gets up there in the summer, you may need to keep that little fellow indoors - but outside might be better for it, humidity-wise until the high temperatures arrive. They don't like it much below 55deg. at night either, though so keep an eye out for cold nights if you do put it outside. Or maybe near an open window?
We get into the low 90's here in FL in summer but I keep my Phals near a patio door, so that does "leak" some cooler air around them and keeps the temps tolerable for them (I think). They love the weather at this time of year, high's near 80 and lows about 60, c/w nice humidity.
