None of those things that you mentioned (except custom) are possible with the xSIID. As you pointed out, it is a relatively simple NFC chip. It won’t be seen as a smart card nor is it capable of being used as a FIDO2 device.
If you need something that is a smart card, can run the FIDO2 applet, and has LEDs, then you want the Apex Spectrum.
In terms of using it to log in, I’m not sure. Apple accounts definitely support using FIDO2 devices as either a 2nd factor or as the primary factor with a passkey when logging into your account via web, but I don’t think that extends to device logins. You can read more here.
Apple does support using a Yubikey with PIV for logging into macOS, but I think it only works over USB hardware tokens, not NFC.
If you still want the xSIID, then the easiest way to use it as a 2nd factor is to have it augment an existing password or pin by attaching a KBR1 to your computer. It will read the UID of most implants, then spit it out as keyboard input. It isn’t the most secure (since anyone with a reader can read that UID), but it is more secure than using a password alone.
For some of your other questions:
Which reader hardware works best on Mac (USB, keyboard-wedge, built-in)?
AFAIK, all of the desktop readers that are recommended on this forum will work equally well for Mac, Windows and Linux. What matters is that they are PC/SC compliant, and that you have PC/SC support in the OS. I believe macOS ships with a version of pcsclite installed, but if not, you can install it via brew.
I recommend either the ACR 1252U or the Identiv uTrust 3700. I haven’t used the uTrust personally, but @tac0s did some testing recently and it has great range.
How do I handle cloning/spoofing risks? Is PIN enough, or should I add a cryptographic layer?
If you are using an Apex with applets such as FIDO2, then there is virtually no cloning risk. The FIDO2 protocols have replay protection built in. The HMAC-SHA1 applet/protocol is more simple and does have a risk of sniffing/replay attacks.
For the xSIID and other similar NTAG cards, cloning and spoofing the UID is definitely possible. The biggest mitigation is physical proximity. Someone would need to have a reader within a few inches of your implant (or some very special hardware).
How reliable is the LED visibility/read range under skin?
It is very reliable in the sense that it will light up when exposed to a strong enough NFC field. Phones, desktop readers, etc, will cause the LED to shine. How visible it is, and how realistically you can show it off depends on factors like install location, phone model, etc. DT sells some boards/kits that do nothing but pump out a strong NFC field and you can use those to light implanted LEDs.
I have a NeXT v2, which has a small NFC-powered LED. Its cool, but really only visible in dim lighting and kind of awkward to show off since the phone or other power source has to be very close. The Apex Spectrum had 3 LEDs. That, and because of its size and the locations it is typically implanted, will be easier to show.
Are there more secure implants (e.g., challenge/response chips like the xHT)?
The xHT is a low frequency implant that doesn’t do much other than serve as an ID. While it does have a challenge/response mechanism in it, it wouldn’t be suitable for authentication to a computer or services without a special reader and custom scripts.
Will this stay useful long-term, or become obsolete with newer systems?
FIDO2 isn’t going anywhere and will be around for a while. NTAG and similar will also be around for a long time IMO. Just how long is hard to say. I’ve had an xNT implanted for 5+ years now and it is still just as useful as it was. The Apex line of implants are more future proof in the sense that they actually run installable applets. As standards change, there’s a chance that new applets can be made to meet them.