Please don’t just use ‘cactus soil’, it needs at least 50% sieved perlite adding to it.

I have a mixture of 'cactus soil,' sand and perlite. Do you think I can cut above the rotting area or will that be too much for the cactus to try and scab? Thanks!

You sure its not just shriveled(as what happens to opuntia humifusa)?

It might be, I am not sure. Is there anything I can do about it?

Well you ought to(very carefully) check the softness of the afflicted area- my humifusa gets like that in the winter, and the pads feel rubbery, but not mushy. (same softness issue works with underwatered pachypodium) If its mushy(tissue gets perforated easily), then amputate. You cant do anything about shriveling, good news its only unsightly. Plant will survive. If its not shriveling, well you got the general idea. Also, use coarse sand.

It is not mushy. In fact, the affected area might be harder than the healthy portion. I only noticed the area when it was completely wilted over.

Than thats normal..... A rotting cactus tissue breaks apart easily, and is either hollow or yellowish mush. You have a combination of corking( natural aging process with cacti), and shriveling(process when cactus is kept dry or cold, but not damaged). Though, just to be on the safe side, check the bright area between the wooden and green parts of the plant. If there is rot, its most likely there. If there is nothing out of place, re bury your plant in soil.

Well its not rot. your roots look healthy enough. So pot the plant again, but in a better soil mix. In a pot with big drainage holes.