Yes, it sounds like you've pretty much got it.

To keep things simple, I'd screen the bark through 1/16" screen (rather than 1/8") to remove the dust, same as the turface.

I would also screen the grit through 1/16 screen to remove fines. I find that, though it's labeled as a particular size range and presumably pre-screened. by the time I open the bag it does contain a not insignificant amount of sub-1/16" particles. This may be due to agitation and breakage during shipment, I don't know, but most brands I've tried (Cherry-Stone, Growers Grit, etc.) do require some screening.

Brian I use the same process you're using. I find 1/16 is a little too fine for screening bark dust with the bark I buy. 1/8 works great.

The >1/4 bark is useful as mulch or orchid bark, and the >1/4 gravel is great as top dressing.