Mine works a little different. There is only one bin for the worms. The castings are removed out the bottom of that bin and into the lower bin. The bedding settles in the upper bin. A lot of worm casting sellers use a similar system, but usually on a larger scale. My bins are roughly 14" by 20" by 16" deep.
I have Red Wrigglers (or wigglers as they're sometimes referred to). They're growing. Yes, they're a lot faster than the nightcrawler we have in the yard.
No flies or bugs of any kind so far. There's a "fruit fly" cure that some worm growers refer to, involving apple cider vinegar with a drop of cooking oil on top. You can "google" it.
Let me know how your system is working for you when you start collecting the castings.