I'm hoping to use the hotkey ⌃+space with another app, but it's currently bound to Trigger Macro by Name in the KM engine. I'd love to change that hotkey for the macro "spotlight" so I can still use it. Is there a way to change the hotkey?
It's really not clear what you are asking. What “macro "spotlight"”?
You can change the hot key of any Keyboard Maestro macro by editing the macro.
You can restrict when a macro is active by putting it in a macro group and adjusting the macro group settings (such as only active in Safari for example).
You can change some system defined hot keys in the System Settings.
That will find you all you macros with at least the ⌃Space hit key trigger -- open the problem one and either disable it or change the trigger to something else. Alternatively, move that macro into a Group that is "Available except in these applications" and add your conflicting app to the list.