yes I have had a few of those also. They don't live too long.

The earlier you can plant out your seedlings the better chance you have of getting them to bloom next Spring. 3 inches tall is plenty big enough, just be sure to protect from snails etc.

Don't cut the leaves. They're manufacturing food for the rhizome.

Chad, can the floppy leaves be due to frequent watering?

Looks like the seedlings are inside, so I'd go with not enough light - coming from the side - and making them lean.
I guess your comment on cutting the leaves refers to the usual practice of trimming fans before transplanting, yes this only needs to be done if the rhizomes have been removed from the soil and have lost roots in the process.

When I separate seedlings which have grown together ( I use 1 gallon pots or 4" pots) I put the whole mass into a water bath to make it easier to separate the roots. Then the seedlings are planted out immediately and shaded if the weather is really hot... That's another reason to move them out in the Spring.