To keep up with the growing data traffic demand, spectrally efficient coherent systems are envisioned to replace intensity modulation direct detection (IMDD) systems in short-reach intra-datacenter interconnects (DCI). In this work, we characterize and test an unamplified coherent transmission system employing a C-hand thin-film lithium niobate (TFLN) in-phase quadrature modulator (IQM) that has 65 GHz 6-dB electro-optic bandwidth and 1.25 V half-wave voltage (V-pi). We demonstrate the transmission of 128 (124) Gbaud 32QAM over 2 (10) km on a single polarization with 2.5 V-pp drive signals below the 20% overhead (OH) soft-decision forward error correction (SD-FEC) BER threshold of 2.4 x 10(-2), corresponding to a net rate of 533 (516) Gbps. We evaluate and discuss the digital signal processing (DSP) requirements. Our results and analysis show the potential of shifting to coherent systems for high-capacity short-reach links below 10 km.