Hi Syed,
Cutting the J6 trace is not needed if you want to debug the MCU using the SWD connector, it is only needed when you want to debug another board using the OpenSDA. Regarding the changes in KDS, you will only have to update the properties of your connection to change the interface to USB Multilink instead of OpenSDA:

The board will get power from the Multilink if you enabled the "Provide power to target" option and placed the corresponding jumper in the Multilink:

Please take a look to the following post created by a colleague that shows how to debug a FRDM-KL25Z board through the SWD connector:
https://mcuoneclipse.com/2012/11/07/jtagswd-debugging-with-the-frdm-kl25z-board/
Hope it helps!
Best Regards,
Carlos Mendoza
Technical Support Engineer