The method you're thinking of sounds good.
These forest type cactus like filtered dappled light, higher humidity levels and more organic components in their potting mix.
You can use bark and even more peat moss than you would with regular cactuses.
A well draining mix that holds some moisture... perlite, peat and fir bark or pumice, peat, and orchid mix bark or something similar to that should work...even a little charcoal to balance the peat out a little.
As far as germinating them, I'd recommend the bag method.
I germinated a seed pod of Hatiora gartneri, and placed the pots in a Ziplock and grew them beside my fluorescent light...that was a couple of years ago or more, and i must confess that they are still in the bag and have become a jungle in there...now i just need to harden them off.
They grow very well in a ziplock bag and seem to really appeciate the higher humidity levels in there.