Kirsten, You need to un-pot this plant and take a look at the roots. You could have root rot, which is causing the canes to shrink up. It is a common mistake to see a plant that looks like it needs to be watered. So you water some more. Later to find out the roots are rotten, thus reducing the water intake of the plant. Thats what I would look at. I don't know what the spots are either. Sorry, Rich