For now, this is the last question I have. Trust me, there will be many more to come! How do I thin the tree out enough to really decide what branches I want to keep, and all of the ones I want to take off. The trees just so thick with branches. I there any specific rules on branching at this point?
@Adair M pretty much covered it. What to remove is where some of the "art" comes into the "Art of Bonsai". I can not tell you what to remove, I have no idea what finish tree you might be trying to develop towards. Often it is better to just let a tree continue to grow out, rather than prune, if you feel unsure what to prune off. Sometimes the additional year or two of growing, the choices become obvious. This is one reason I repot first, and arrange the roots preparing for a future shallow bonsai pot first. Then let the tree recover form the repotting, without any pruning or styling. Then the tree will have been in my possession for 2 to 5 years before I begin styling the tree. That is time to get familiar, and usually by then, one or two styling options become obvious. My best trees came about this way. My worst trees were trees I styled the first day I owned them,. No time to consider multiple options. So give yourself time, you don't need to style right away. As the tree grows, you will see more options.
So, do you want the spruce to look like a spruce? Hence naturalistic design? Or do you want it to look like some other iconic tree in your mind's eye? If you want it so look like a spruce, hanging branches like trees in high elevation mountains? Or more horizontal branches, like eastern white spruce in the northern forests of New England and eastern Canada? Or do you want your spruce to be a stand in for say, maybe an old eastern white pine? Where you have a long horizontal branch, followed by several short branches, then another long branch then several short branches up to the apex. All the branches on eastern white pine tend to be quite horizontal.
So it is up to your, consider your possibilities, and what you would like. Then see if you can get there with the branches that actually exist in the tree in front of you. The interaction of considering a possible design, then looking at the tree in front of you, then modifying possible designs,then looking again at the tree in front of you, then adjusting your plan, that is where the "Art" happens. Time for consideration, really helps.
Just from the photo, I would probably "jin" or create a deadwood stump out of that first lower branch. Its removal will give you the appearance of taper, which is important in creating a "tree" image, rather than a shrub.
But if you kept it, it might become your "tree". Personally I would not keep that first branch, but that is my taste, it does not have to be yours.