Welcome to Paw talk
Nico is adorable!
It looks like you already got some great answers to your questions but I'll see if I can think of anything to add.
1) The first night i just put the water Bottle, Food and Hay in the cage so i can see where he likes to use for his toilet needs. The next night i placed the litter pan in that spot and he has been using it for his "P" ever since. How do i get him to use it for his marbles?
Nico is still young, and like human babies you can't expect rabbit babies to have perfect bathroom habits. He should get better as he gets older, and getting him neutered when he's old enough should help as well. Rabbits use fecal pellets to mark their territory. Once he gets more use to his new home, he may mark less and less. But from my experience, baby rabbits can be very messy and you may just have to give him some time.
2) The cage has the plastic grated flooring which he seems to like (the second night i put the shelf/loft in the cage) But I am not sure if i need to get him some bedding? if so do i get something to put it on/in? I am presuming he likes it b/c he almost is never seen up on the flat loft part with a solid floor.
Most people only put some kind of absorbant bedding in their litter boxes. I give my rabbits fleece blankets to lay on outside of their litter box, fleece is good because it doesn't fray like some fabrics do so it is less likely they can get their claws caught in the material. It's also good because when it gets dirty, you can just wash and reuse it. Honestly my rabbits play with their blankets more then they sleep on them, but I like to give them the option of sleeping on something softer than the cage floor anyways. My rabbits also have a small dog bed in their cage and they loooove laying on that.
3) I have been taking him out and letting him free run of the living room (supervised and certain areas blocked off for his safety) but he tends to sniff around and then just plop down and not move. Am I doing something wrong? or does he just need more time to sit and relax.
He may not be use to your house enough to feel comfortable with running around and doing binkies (happy jumps). I'm sure eveutually he will
All bunnies do have diffrent personalities too so he might just enjoy laying down and relaxing more than running around like crazy. My bunnies do that sometimes too.
4) He seems to be quite scared when i hold him or pick him up. I hold the hind quarters and his feet on my chest, if that makes sense and pet him. I try to lay on the floor with him and also put him on my chest without holding him so he knows he can leave at any point. He does leave but not really fast. Is this normal at first and/or am i doing something wrong?
Most rabbits, as stated before, don't feel comfortable with being held. They are prey animals and the only time a wild rabbit would be picked up off the ground is when it's in a predators mouth. One of my rabbits absolutly hates being picked up, so I don't do it unless I adsolutly have too. Interact with him on the floor and once he's more use to you, he should seek out your attention. Let him come up to you for pets and cuddles instead of picking him up.
5) When can i offer him a treat? the breeder woman i bought him from said no fruits til e is 6mo. I would like to give him something to encourage a positive experience with me.
Your rabbits breeder was right, baby rabbits have very sensative tummies and you should introduce new veggies/fruits to them very slowly. Give them one new thing at a time so you can make sure it doesn't cause any problems, and start by only giving him very small amounts. You can work up to giving him larger amounts and more kinds. Veggies arn't normally considered treats but there are some my rabbits go crazy for. Also, my rabbits love papia tablets, which are good because they can also help prevent hairballs.
6) I always keep the cage door open when i am around so if/when he decides he wants to use the plank/ladder/walkway to get in and out he is allowed. (its only open when i am in the room)
I do this too. Don't be discouraged if he doesn't come out much, especially at first. Rabbits see their cages as their own personal spaces and most of them actually enjoy being in their cage, they feel safe and comfortable there.
7) I am only able to spend 10 minutes with him in the morning and about 3 hours in the evening that he is out of the cage, is this enough? is it bad that he is alone during the day? should i move the cage next to a window when i am not home?
I wouldn't put him next to a window. Rabbits should never be placed in areas with direct sunlight as they can easily overheat. 3 hours is fine - the House Rabbit Society recommends 4 but when I don't have time to let my rabbits out for 4 they don't seem to mind. Give him toys to play with during the day while your gone. My rabbits seem to sleep alot during the days though. If your really worried about him being lonely, you could consider getting him a friend. Rabbits are social animals and most enjoy having a bunny friend. But two rabbits should not be allowed to live in the same cage untill they are both fixed and have been bonded to each other.
I hope that helps some
If you have any more questions please feel free to post them.