What kind of stitching to use for a leather bag?

[zuludog]

I'm not going to comment on the actual stitching, others have gone that well enough, but I thought you might like a comment about your stitching chisel

I have a couple of the Tandy Craftool chisels, with 4mm spacing, and I have improved them by carefully polishing the prongs with a needle file and fine abrasive paper. I use 600 grit paper glued to a sliver of wood - actually an old lollipop stick

The exact grade is not too important, and neither is having a needle file, just work your way down from about 200 to 1,000 grit in a few steps. Search & Surf, you can buy pack of assorted fine grades

[CraftyNick]

Thanks for the tip.  I did find that the prongs tend to stick a little.