I decided I don't want to use the development board and removed the attiny85 to program with a nano. That should work, right? I'm impatient :)

Yes. I have successfully programmed and removed the attiny85 to insert into a circuit. :)

I want to power this externally with a single 2032 button cell (3v) which the attiny85 should allow. will that work? (despite listed spec)

I haven't tried it myself but this guy has https://forum.arduino.cc/index.php?topic=595504.0

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Ximimark 3pcs ATTINY85 General Micro USB Development Board for Arduino

Product ID: 336333149

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Description

Specifications

Wireless Type	802.11bgn
Brand	Ximimark
Item model number	8541616249
Operating System	Linux
Item Weight	0.634 ounces
Package Dimensions	4.8 x 3.2 x 0.3 inches
Manufacturer	Ximimark
ASIN	B07FCHFB85
Is Discontinued By Manufacturer	No
Date First Available	July 9, 2018

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