conversions are separate from contributions. Annual limit on contributions but not on conversions.
And conversions do not reduce contribution limits.............surprisingly difficult to do google search on that since it doesn't show up in search summary......only in article itself.
here under special rules: http://www.rothira.com/roth-ira-rules
"You can still make your annual contribution if you also convert money from a tax-deductible account (like a traditional IRA) to a Roth in the same year."