Quantum mechanics tells us that if a state is in the eigenstate of its Hamiltonian, the system would evolve coherently with $e^{iHt}$.
Not really, because $H_0$ which the eigenstate refers to is not the full Hamiltonian describing the evolution of the system accurately when the system is in contact with a bath. $H_0$ would be accurate if the system was isolated, and then the state evolution would be trivial $\psi(t) = \psi(0) e^{-iHt/\hbar}$, where $H$ is some eigenvalue of $H_0$.
However, since the system (which is in its ground state) is not an isolated system it would eventually evolve into the same state as the finite temperature bath (i.e. thermalize).
Not for the quantum state $\psi$ (ket) - that is supposed to evolve in a complicated way, due to interaction with the bath.
Above, you're using "state" in the other meaning, as density matrix. The relation between a quantum state and "quantum statistical physics state" = density matrix is like the relation in classical statistical physics between a microstate $(q_1,...q_N,p_1..p_N)$ in the phase space and probability density $\rho(q_1,...q_N,p_1,...p_N)$ on the phase space. Density matrix is "kind of" like probability on the space of some basis states which play privileged role (Hamiltonian eigenstates), in that it describes "non-quantum" probabilities, describing likelihood of various quantum states due to lack of knowledge of the actual quantum state. However, it is different from just probability distribution function, as it contains also off-diagonal terms, sometimes called coherences.
So the correct statement would be that due to interaction with the bath assumed in thermodynamic equilibrium, which we describe by density matrix $\exp(-\beta H_{bath})/Z_{bath}$, we expect the system's density matrix, due to interaction, and unlimited heat capacity of the bath, to become similarly $\exp(-\beta H_0)/Z_0$. That is, we expect system with density matrix having only one diagonal entry to be 1 and others zero, describing a system in its ground state (a pure density matrix, a pure state) to evolve, after enough time, into a density matrix where all diagonal entries are non-zero, and their values are Boltzmannian probabilities of observing the corresponding energies (eigenvalues of $H_0$), implied by their energy and degeneracy.
My question is first is my interpretation correct? If so, what determines the thermalization dynamics (is it connected to decoherence?) and for how long would the ground state evolve under its Hamiltonian before it "switch" to become thermalized?
Evolution of the density matrix towards equilibrium can be described by the so-called quantum master equations, which are models that describe how probabilities (diagonal elements) and coherences (off-diagonal elements) evolve in time. How long this takes depends on parameters in these models. It's like with populations in chemical kinetics, there are rate constants, except in addition to probabilities, we have coherences as well.