Thanks for using the forum. I am happy to address your questions, and my answer will be based on the information you provided here. Please make sure you recognize that this forum is for educational purposes only, and it does not substitute for a formal office visit with your doctor.
Without the ability to examine you and obtain a history and review your imaging, I can not tell you what the exact cause of your symptoms is. However I will try to provide you with some useful information.
It sounds like you have arthritis of the spine (which is what the degenerative changes and osteophytes mean), which is very common in older adults but also younger adults who participate in certain athletics or occupations. The L level is basically the lumbar level, the lower back. Between the 4th and 5th lumbar vertebral bone, there is a protruding disc. There is a material that cushions the space occurring between the vertebra (bones of the spine). This material may sort of be squished out from in between the two bones; this is called a herniated disc. The disc may push on surrounding structures, namely the spinal cord and/or the nerves exiting from the spinal cord. The perineural cyst is just an outpouching from the coating of the nerve and is likely insignificant.
What to do depends on your symptoms and the exact imaging findings.
In some people, a herniated disc does not cause symptoms at all. If there is pain, even with sciatica (shooting pain down the leg due to the disc pressing on a nerve as it exits the spine) for most people, the pain of a herniated disk resolves over 4-6 weeks. The most severe pain actually eases up within 1-2 weeks. Only a minority of people every require surgery.
With time, the amount of disk that has herniated shrinks and with time resolves completely in most people. Therefore, for the majority of people, non-surgical treatment is the first option. Arthritis of the spine is also usually not treated surgically except if significant narrowing of the spine or pressure on nerves is occurring. This treatment may include medications (non-steroidals such as advil), sometimes steroids if there is swelling (edema), temperature therapy (hot or cold packs), stretching and controlled physical therapy, muslce relaxants, and so on, these are best prescribed by an experienced physician, each has its own indications.
In a minority of patients, surgery needs to be done urgently. This often is the case when the herniated disc is pressing on the spinal cord itself. Surgery is emergent so that permanent spinal cord injury does not occur if the spinal cord is really compromised. Another indication for urgent surgery is if there evidence that a nerve is being compressed on to the point that its function is impaired. Symptoms suggesting the need for urgent surgery includes muscle weakness, loss of bowel or bladder control, loss of sensation, particularly in the pelvis and severe and progressive pain.
In some patients, after conservative non-surgical therapy is tried for 4-6 weeks and the pain is still severe or if other symptoms/indications arise, surgery is the next step.
It would be best for you to discuss surgical and non-surgical options with your physician.
Thank you for this opportunity to answer your questions, I hope you find the information I have provided useful, good luck.