Does needlecast spread to other trees?

Yes. needlecast moves to other trees, which is why one infected tree is a decision about the whole yard rather than about that tree. Rhizosphaera needlecast is near-universal on mature blue spruce here. Fungicide can hold the line on a tree that still has most of its canopy; a spruce that's bare halfway up is not coming back, because spruce doesn't refoliate old wood.