I probably would go 700c. I don't think I have any good 27" rims, so if I have to relace (which I've never done before), I probably would go 700 for tire selection.
As for just putting the wheel on there, that was to just a) figure out what was required in terms of spacers on the hub, b) getting chainline figured out, and c) just ride-able enough to determine if the reach was ok. I really don't want to do too much work in case it's simply a poor combination.
I'll look and see what is out there for short reach stems. I don't understand the reasons behind it, but I do recall reading that short stems make for poor handling, though. Although, that's probably moot with a very different set of handlebars... I'll have to start looking around for these handlebar bits then.