I've been trying to add Ghost to my existing droplet where my website is running.

I'm using a droplet with ubuntu and Nginx. The website is running well. I'm running my website on port 3000 on a node server.
Here is my sites-enabled default server block

server {
    listen          80;
    server_name     mydomain.io;
    return      301 http://www.mydomain.io$request_uri;
}

server {
    listen 80;

    server_name www.mydomain.io;

    location / {
        proxy_pass http://localhost:3000;
        proxy_http_version 1.1;
        proxy_set_header Upgrade $http_upgrade;
        proxy_set_header Connection 'upgrade';
        proxy_set_header Host $host;
        proxy_cache_bypass $http_upgrade;
    }

    access_log /var/log/nginx/access.log;
    error_log  /var/log/nginx/error.log;
}

Here is my sites-enabled server block for the website.

server {
  listen       3000;
  server_name  mydomain.io;
  location / {
      root   /existing-website;
      index  index.html index.htm;
      auth_basic "Restricted";
      auth_basic_user_file /etc/nginx/.htpasswd; 
  }
}

I have downloaded and unzipped Ghost in /var/www/ghost, and installed with npm install --production.
I have configured the Ghost production config to have the URL set to https://mydomain.io/blog and the port set to 1000

production: {
        url: 'https://www.mydomain.io/blog',
        mail: {},
        database: {
            client: 'sqlite3',
            connection: {
                filename: path.join(__dirname, '/content/data/ghost.db')
            },
            debug: false
        },

        server: {
            host: '127.0.0.1',
            port: '1000'
        }
    }

My most recent and promising attempt to get the blog running is to add the following section to the default (main) Nginx server block.
I believe this should pass requests to mydomain.io/blog on to port 1000.

location /blog {
      proxy_set_header   X-Real-IP $remote_addr;
      proxy_set_header   HOST $http_host;
      proxy_set_header   X-NginX-Proxy true;
      proxy_pass         https://127.0.0.1:1000;
      proxy_redirect     off;
  }

When i restart nginx and run production

service nginx restart
npm start --production

I get the folliwing output:

> ghost@0.7.6 start /var/www/ghost
> node index

Migrations: Up to date at version 004
Ghost is running in production... 
Your blog is now available on https://www.mydomain.io/blog 
Ctrl+C to shut down

However, I cannot access it in the browser.

What can be wrong in my config here?
Note: I'm using cloudflare to 'supercharge' my website. Could it cause trouble?

Thank you