I remember you posting it Silver! Osha is very social :)
Olympia, the bigger the better with litter boxes, a corner one in pet stores is pretty cramped, bunnies LOVE their litter boxes and spend time in them unlike cats who use them just to use. So I wouldn't recommend anything smaller than a cat litter box (which dollar stores sell for 1-2$) and if it's tight in the kennel, what odds as long as he uses it. Pack all his hay in it. Since he has 8 month old hay you can use that to spread on the bottom of the litter box so he's encouraged to hop in, and use the fresh hay in his hay rack to eat. Everytime you see him hop in to the litter pan praise him with your new bunny voice (trust me, every bunny owner has a bunny voice) and you can reward him with something like half a raisin (for now, full raisins later when he's healthy)
If he's kicking wood chips, he'll kick carefresh lol yes you can use blankets, sheets, fleece and whatever else. In the summer I like to have a linoleum tile for cooling off but then Acacia chewed the edges -_-' So now I just use blankets all throughout, underneath is newspapers so she doesn't slip and get her foot caught in the bars. Bunnies are messy and since he has had such a rough go at things up until now he might find it necessary to pee and spray and poop on Everything. Nothing is safe. Try to not scold him is all, when he pees simply say "no, bad bunny" in your regular voice and put him in his cage. My mini rex was cuddly and liked being up and the rexes that go to the rescue are generally pretty cuddly too, it might be a breed feature. Enjoy it since he's so plush!