• Co–O–Co bonding influences are observed on Co doped ZnO nanoparticles. • Suppression of Zinc interstitials, Zn i and oxygen vacancies, V o is noted with increased doping. • Exceptionally low level of BMP density (3.22 × 10 7 /cm 3 ) is noted in 5 mol% doped nanoparticles. • Enhanced luminescence characteristics justify the nanoparticles suitability for optical devices. Co–O–Co bonding mediated influences are discussed on the structural, defect content, magnetization and luminescence characteristics of Co doped ZnO nanoparticles. X-ray diffraction (XRD) studies indicated an increased fraction of secondary phase while varying Co doping levels from 0.45 to 5 mol%. Contrarily, a reverse trend is noted on the concentration of Zinc interstitials, Zn i and Oxygen vacancies, V o defects through Photoluminescence (PL) spectroscopy. For 5 mol% doping level, Bound Magnetic Polaron (BMP) model fitting of Magnetization versus magnetic field, M(H, 300 K) curve yields an exceptionally low level of BMP density i.e ., 3.22 × 10 7 /cm 3 thereby governing the dominance of Co–O–Co exchange interactions over V o based Co– V o –Co interactions; while PL result displays an enhanced UV emission efficiency suitable for short wavelength optical devices.