No expert on the topic, heres what i think.
As for the loop or TFO.. i would go with the tfo just because of the warranty issue as you stated.
An 11'2 7 wt would be an awesome stick for the bow... not to big and not to small. For me, the transition to 11'6 from a 9'0 was a big one and even now casting a rod that is a foot longer than im used to is a big change. The 11'2 may be a bit more forgiving. The airflo 40+ is a line ive heard is good for signle hand spey casting, havent tried it though.