http://trove.nla.gov.au/ndp/del/article/13387970
This is an excellent book, I've just re-read the three chapters about Coolah and scanned the rest, but it does not appear to mention your relative.
The first inn was established at Coolah in 1848 by James McCubbin. Growth in the area was slow, in 1860 the entire district had a population of 60 people. In the 1870's Coolah was on the droving route from the northwest to the railhead at Singleton. After the railways were extended to Gunnedah and Wellington, this siphoned off most of the long-distance livestock droving and the town went into decline.
The local council was created in 1906. There was more growth following the construction of a railway branch and the consequential viability of wheat farming.
Most of the information in the book comes from the collected recollections of people who were very old in the 1970's - people born in the 1890's. They talk about life they recall in, say, 1915 and things their parent's told them - someone who died in 1880 and left no local descendants is not going to be high on their agenda.
Their idea of "early history" in Coolah, is the childhood reminisensces of a man born in 1899.
The book does mention several other stores and hotels, but none before 1880.
On page 127 there is a photo of the shopfront of Scully the auctioneer, probably about 1910, it's undated.
On page 132 is a photo of the main street in 1904, apparently reproduced from a photo in the "Sydney Mail" of 20 July 1904. And a photo of the Royal Hotel ( quite new in 1904 ) from the same paper.
On page 135 a photo of the main street in 1932.
A couple of photos of the post office and police station and hospital in 1912, both those buildings almost brand new - not there from 1880.
It says that F J Bird, the grandfather of aviatrix Nancy Bird Walton ( 1915-c.2006 ) owned a shop there, which he sold in 1883.
If you want to know what it looked like in 1870, look at the photos of Gulgong, which are extensive online. The flickr account of the NSW state records would be useful to look at.
