Roland camm 2 pnc 2300 spindle upgrade help

Having just finished refurbishing and converting a Roland camm 2 pnc 2300 to run from Linux CNC, I have started doing some cutting. I have retro fitted a ER11 collet holder to the existing spindle assembly (used to be a hollow spindle for single diameter engraving bits). when using larger bits(6mm) the spindle bogs down significantly.

A overview of the current setup
Attachment 13252 Attachment 13253 Attachment 13254

the spindle is driven by a 26W dc motor mounted on the X carriage. the spindle is driven by a belt that rides up and down a large pulley as the Z axis moves. the belt gives a ratio of 3.5, the motor is rated at a maximum speed of 4300RPM meaning the spindle would go at just over 15000RPM. the motor is controlled by E-bay 555 pwm controller with linux cnc incharge of the enable pin, there is no speed feed back.

the plan
geting speeds and feeds right is tricky when you don't know the spindle speed, I am planing to implement a RPM readout and PID speed control (arduino,hall efect sensor, lcd ect) but is there any point in up grading the motor, most small mill's/routers have at least 100w. if i were to upgrade I would probibly go to style RC brushless motor.

question's

1. would a upgrades spindle allow better cutting or would I soon come up against physical rigidity/stepper power problems?
2. would the belt drive start to slip making the extra power unusable? (at the moment the motor stops rather than the belt slipping)
3. what would be a ideal RPM range of a new spindle? 15000RPM seems like a lot, and it gets very noisy.

Thanks

Peter