Yes, I think that sounds like a workable plan. It looks like the plant either survived root rot, or was a grafted plant and the root stock rotted. Or maybe they were cuttings stuck in the soil to root just before you got it. Your gritty soil looks better than what they are in now. I think the bonsai pot should work fine for rooting them together.

The ends look calloused over, and with roots forming, now is the best time to repot. I would wash all the old soil off them, and maybe use a thin layer of pure grit over the soil to reduce the chance of rot. Water them only with a little spray near the roots at first, and let the soil dry thoroughly before doing it again.

As for an ID, the spines look like Cleistocactus, but as you say, crests are hard to identify. Good luck!

Thank you so much, I've been nervously staring at the two pots next to eachother for a couple of days! I think the woman who gave them to me had started propagating but she did say they were being neglected. I'm so happy that they are growing roots now.

I'm going to do everything you suggested right now. And thank you for the ID I believe that's it! I can't wait until it starts to grow. :)

Hoping this will work. They look better already!