Re: the carbonation drops, you're fine to use sugar. Carbonation drops are used because they're simple - X drops per bottle. You can certainly measure out sugar per bottle or you could rack into another container onto the sugar.
Re: the bag, As I read it, you're going to put a bag in for the boil with coriander seed, orange peel, and saaz hops. Once you stop the boil, pull that bag out. That will remove the all three of them. Nothing should be remain in the beer (though it's possible pieces makes it through the bag)
Hope that helps!