Essentially you can go up until hip rocking rubs your undercarriage raw, and can go low until insufficient knee straightening causes knee pain which indicates potential cartilage damage.

You can go with a taller stem. Don’t raise your stem above where the insertion limit becomes visible at the top of the headset. With such a small frame and tiny head tube, a taller stem may show something called “giraffe effect.” This is ugly, but not dangerous. Once you can get the bars up level, you can think about whether your stem extension needs to be changed, and if your saddle lets your Wright distribution be what it needs to be. I’d suggest looking for a used Nitto Technomic Deluxe, which will give you about 5 cm more bar elevation. A Technomic will go a lot higher, but I think that will be too much if your stenosis is under control.

I strongly suspect you should have a larger frame.