How to set up InDesign to print two pages on one 8.5x11 sheet?

Going to do the binding mysellf.

Does your printer print duplex? I think to get InDesign's Print Booklet to work you will need a duplex printer. Otherwise you can export a PDF and use Acrobat's Booklet feature, which will let you print the front and back of the sheet separately.

Who will be doing the spiral binding?

Who will be doing the final printing?

In addition to what Derek and Jongware said you should be aware that if there is any art that bleeds then you will have to print your pages on a larger page size with crop marks and then trim them to size. This is because virtually every printer needs approximately a quarter of an inch for its grippers and that quarter of an inch will print as just blank paper. Also, professionally speaking, spiral bound books should be prepared as single pages with bleed all around since they will actually be printed as single pages and then bound with wire.

Are you proposing to print this document on your desk-top printer? If so I suggest you do some tests before you proceed to see if it's feasible – that is to day whether you can print double sided sheets that register.

If you're cutting these in half by hand you can set it up as two facing pages (or one large one!).

You add page numbers via the Master pages – Create a Text Frame then: Type > Insert Special Character > Markers > Current Page Number (a letter A will be inserted which you can position and format and which will appear as the page number on the document's pages).