I don't think a leopard gecko would ever be able to swallow a piece of coconut bark, and while this isn't a natural substrate (leos like sand), I would say it's probably safe. I've seen fat tails live on this with no problems. I would'nt advise sand unless you get the extremely fine kind that is made with calcium. Otherwise, they can swallow bigger pieces of sand and block their intestines.
Female leos dig in their wet boxes to lay their eggs. They could be digging for other reasons, perhaps just to get comfortable or to find more moisture. Be sure the wet box is filled with something soft, like moss.
Be sure not to keep a light on 24/7. The red light is okay for nighttime, however. Most animals cannot detect a red light. Be sure your lizard has a place to cool down, if necessary. Since you have two heaters (a bulb and an underground) be sure they aren't heating your whole tank up. Above the heater, your thermometer should read around 88. It should be cooler in the rest of your cage.
Good luck!

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