I would use medium bark - yes, air around the roots is vital. This is still a fairly small plant, so a pot is appropriate - and roots look good. but larger Coelogyne plants do better for me in hanging baskets (net pots), usually with spaghnum, long fiber and loosely packed. So they get moisture, but lots of air. (A "formula" that I use for a lot of orchids - the "Andy" approach) But that's under my conditions - mostly outdoor growing, frequent water, also with lots of air movement so that there is also a tendency to dry quickly, They need moisture, but the "air" part is really important too,
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