The Section 31 arc really wasn't necessary to the episode, and it was disappointing they had to force that in there so late. You'd think the Section would've had a mission or two regarding the Xindi, the Klingons or any of their earlier encounters if they decided Reed was dependable.
But Enterprise spent half it's existence doing this. "Hey let's do a Ferengi episode!" "Let's do a BORG episode, how cool would that be?" and so forth... so someone in the writers room probably had been advocating a Section 31 episode for a long time and got his bone. Even though it in essence contributed nothing to the forced drama of smooth headed Klingons. No long term thinking beyond the single minded "cool" factor of the episode of the week.
As for Phlox? Someone cloned him. He's like all moral and stuff now, you almost forget he advocates genocide.