So will I be good cutting the wires, pulling it up into the ceiling - pulling down in another conduit - and only hooking up the blue and white wire... properly.
(I have the tools - ran utp everywhere, just never done a phone line before)
Yip to all above - everything in this house has been done ****ty. Pipes, electrical, etc - we're spending over R400k fixing the kitchen area, plumbing and electrical.
Yes no issues were you to pull back the cable and re route it into new conduit. Suggest you check on the other end of the indoor wiring cable what has been done with the spare pairs. The cable normally used always have spare pairs available and you should not cut them off -- may just need them at a future date. While you are working, make sure the two conductors in use are not able to short each other out --- you could trigger off a fault in the exchange resulting in the line being disconnected, which will then require you to report a fault to get it re-connected.
The important thing is to ensure you maintain the association of the individual conductors in the pairs with each other as they are twisted together and should be used as such. Do not end up splitting wires from each other in a pair. The basic paired cable uses the colours, Blue, Orange, Green, Brown, Slate (grey) each with a white leg.
The neat way to take up the slack on the unused pairs is to first twist each pair together once or twice, then wrap them neatly around the cable one at a time leaving only the pair you intend to use available for connecting. If you want to be really fancy, a small piece of shrink wrap around the spare conductors will finish off the job.