Hi, I've never heard of a Ponderosa lemon (only a pine, or a ranch :-) but what you're asking is for an instant course on a big subject. Bonsai does require more than a couple of tips here, but it's not hard to get started, especially if you already have a healthy tree (plant) to begin with. The quick answers are yes, you have to cut the roots and (in time) use a small pot, but there's a lot to know about those steps, when and how, and which one, etc., not to mention things like lighting, humidity, etc., though you're obviously doing something right to have kept it going this long. It's also very important to know when and how to cut back, because doing it at the wrong time and indiscriminately with regard to what's cut aren't going to get you a nice tree, just a hacked up shrub. I suggest you try to find a bonsai club nearby, because it's the best way to start out... by actually seeing how things are done, finding out about watering (a very big issue in bonsai, which are not treated like house plants), soil mixes (very important too), and what makes a bonsai look good (or not) and why, plus how to do root work, etc. Until then, please don't just stuff it into a little pot as you'll likely lose it, and ditto for root chopping. You can go to www.bonsai4me.com for general info. on basics, www.bonsaitalk.com to ask and share info., and www.bonsaihunk.us/cultural.html for excellent advice on growing tropicals indoors. One thing I will tell you is that bonsai come in all sizes, and that fruit and flowers won't 'reduce' in size like leaves, so you may end up with a relatively larger tree (which is fine) if you want to keep a few lemons on it at any time, or else end up pinching off new fruit buds to keep the tree's energy into growing a bonsai and not to have lemons weighing down branches (or breaking them) all out of proportion to the rest of the tree. Come back and let us know how it goes!

It needs to be kept mostly frost-free. It will grow best in full sun. At this stage it will grow well in regular potting soil with normal watering, but will need a free-draining soil when it is larger. It will grow in regular slightly acid soils but not so well on alkaline soils or very acid soils.

Actually, most - not all, but most - citrus produce seeds with nucellular embryos - they're clones of the 'mother' plant. But, you'd have to grow that seedling out through its thorny, upright-growth habit juvenile years before it reached sexual maturity, lost the thorny habit(on mature growth), and began fruiting. Most commercial and hobby citrus trees are created by grafting/budding 'old budline' scions/buds onto appropriat rootstock - in most cases, trifoliate orange, Flying Dragon trifoliate(for the most dwarfing) or sour orange seedlings. Or, rooted cuttings. These resulting grafted or rooted specimens have the spreading, orchard-tree type of growth habit and absence or diminished thorniness that you would not see with a seedling.

Many, if not most, citrus produce nucellular embryos rather than zygotic, so resulting seedlings are essentially a clone of the 'mother' plant. From a friend who 'plays around' with citrus: "First of all the hybrid seed thing DOES NOT PERTAIN TO CITRUS, except for a very few varieties, Clementine being one. Almost all sweet oranges, true grapefruit, lemons, limes, pure mandarins (other than King and Clementine), most Tangelos, hybrid tangerines and tangors (except Temple) do come true from seed. If you planted a Clementine seed you will not get an exact copy of the mother tree, but will get a mandarin type of fruit." However, seedling citrus have to grow through a relatively long 'juvenile' period, during which they exhibit very thorny upright growth before they 'lose' their thorniness and begin fruiting. You might have to wait 5-10 years or more. Most commercial citrus plantings are done, as dan_staley indicated, with grafted/budded trees, using trifoliate or sour orange rootstock and 'old' budlines of desirable mature citrus cultivars. Some hobby/containerized citrus, like Meyer lemon, are routinely propagated from cuttings Seedling citrus do make handsome container plants - in spite of the thorns. Remove & clean the seeds, allow them to dry only for a day or so before planting - if they get too dry, they lose viability.