Internal vs External vs Wall Conditions with regards to Free Convection

Hi guys, I'm just starting out in using flow. I have a simple configuration that I'm trying out with a heat generating chip at 50W above a cool plate with water flowing through (see picture attached). I want to add in some free convection and specify some heat transfer coefficient between 5-25 W/(m^2*K).

When I have an internal study I have to specify a wall condition with a heat transfer coefficient. Is this for convection or where is this being applied? What exactly is this? When I have an external study, I can't specify any wall condition or heat transfer coefficient so is free convection being considered? In the wizard setup, I select water (primary) and air for my project fluids.

Happy to clarify if this doesn't make sense. Thanks for any elucidation.

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