Rabbits actually eat their poo - they are meant to as they reabsorb food from it (my vet sister told me that).
My only thought is that perhaps he is lonely. We bought 2 rabbits together and they don't do what you describe. One rabbit loves to be handled - the other one does not and tries to run away. You have to keep handling them though, especially when they are on their own. My DH built a wooden frame that sits against the hutch so that we can leave the hutch door open and they can hop in and out. The frame is supprounded by wire mesh. Our hutch sits on a concrete part of the garden and I feel they get enough exercise that way. The frame is tall so the kids can stand in it and touch the rabbits without them escaping too fer. We saw it on the telly.
Have you had your rabbit vaccinated against miximatosis (sp?). We need to do that soon as they can pick up the bug fron hedgehogs that have had fleas in the garden.
We only put wood shavings in the toilet side. The rest is hay in the bed and middle 'garden section'. We put newspaper in first.