Mosfet amp spike in SPICE when connecting power
The inrush current is mostly due to the 500uF cap you have. If you downsize it (or add some series resistance to it), you will see the current spike go down. Whether or not this is an issue depends on what the datasheet says—there's a pulsed current maximum spec.

Also, the reason your mosfet is conducting—as shown in the schematic—is because of the body diode. This is an N-channel mosfet so you'd need a voltage at the gate such that \$V_{GS}\$ is high enough to turn it on. This means \$V_G\$ needs to be greater than supply voltage you connected directly at the nmos' source. The mosfet is off in the shown configuration (gate is grounded) but the body diode is forward biased. 

If this is a high side switch application so a pmos is an easier choice.