I did my basement with drop ceiling just a few months ago, so I am quite familiar with what you are talking about. Assuming you are living in Alberta (code is different for other provinces)....
You only require an insulation box if there is going to be insulation in the same floor joist as the light. This is to prevent you from burning your house down, as the insulation can ignite if it gets hot enough. There are pots lights with boxes that are specially made for drop ceilings. The actual light part can extend down beyond the box a good 4 inches or so and won't pull up on the ceiling tiles.
Yes, you can just remove the insulation around the light, but I can't remember the minimum distance it has to be from the light. 18" on each side rings a bell, but you should try to look it up yourself just to be sure.
I wouldn't suspend the light from the joist directly. I haven't seen a light that is even designed to do that, and it sounds dangerous.
|