Sounds like your doing exactly what it needs, sphag an mist every other day to promote root growth...good luck.

It's ironic with orchids of the same alliance that different growing conditions happen...I have just today moved my paph's around again, due to some producing some being just down right lazy...will only take a week to see a difference in the enviroment change....frustrating but extremely challenging.

This tiny pest is a first sign of overwatering. If you see them it means you need to decrease the amount of water or to repot the plant in another mix that will hold less water. Good luck with the paph!

Repot. Get rid of any dead roots.
Good air movement may help as well.

I wasn't sure if the threads which I encountered during repotting were "roots". I guess the velomen came off, but are they still alive? I didn't cut them, and, besides this was my first paph repotting process, so I decided not to experiment that far.

I don't have great experience with Paphs and Phrags, but that bark I recognize! It's way past time to repot! White specs are most probably rot-related and I think just about all orchids appreciate driesh conditions for the roots (that means they like to dry out over night).