Need some advice for running a tower climber type game for my brother. Got this idea from the arena thread over in PBP. I was thinking a procedurally generated tower including combat floors (the majority of the tower), rest stops, merchants, and puzzles. Any advice would be welcome!

Honestly, your short list and planned use of generated content is exactly how to do this tower concept. You could go full roguelike no less.

With that inspiration already in place the next step is to just do it. Start charting floors, encounters, etc.

Ye, Just trying to figure out how to make a semi balanced random roll spread sheet. mainly asking for suggested odds that something will come up.

I would use a random dungeon generator, and just add stairs. If you want stores and merchants inside the tower, just place them where you'd like. 

Or look to hex crawls for inspiration. 

Or maybe the mad mage book. That's mostly labyrinth from what I've heard....