I do no sparge BIAB batches in a cooler just like you are planning. I use a 5 gallon cooler for 3 gallon batches, so you should have plenty of room. My efficiency is generally 80% into the kettle for beers above 1.040. As long as you have a fine meshed bag, then squeeze out as much as you can. I'd you're using something with a wide mesh like muslin then I wouldn't squeeze so much so you don't get husk material in the boil.