Mine are in a run with one end boxed off wi a drum with a blanket for sleeping. dnt be suprised if they dnt use the toilet area i have litter tray in mine. and its only my oldest jill that use it the kits use the other side. i have drainage pipes to play in and some smaller piping for the jill kit to get away from the bigger two. the run is 8ftx 4ftx 2 high when i get sum more tubin the hutch will be connected up. your set up looks good but i would take the carpet and the plastic out. for bedding i use a fleece blanket or as said before old clothing or towls. i tried shreaded papper but that