Welcome Jen : )
You’ll have to do a bit more “tweaking” to set them up for successful use of a box. The equine bedding is a good litter (as Sarita said, use in the box only). You won’t need as much litter in the box as you would for a cat so it is quite economical.
Hay over or in the litter box is a good move. You can put a layer of hay or straw over the wood pellets if you find they are avoiding standing on them.
The things I’d change are:
1) Use a rectangular cat litter box
2) Cover the drop-thru flooring with something solid. Coroplast/signboard is popular, or you could use tile. Even just use the catch pan as the floor if possible. Keep the flooring free of bedding.
3) Put some droppings in the box so they identify it as the toilet spot. Mop up any pee accidents of the flooring with paper towel and put the soiled towel in the box. Again, to help them identify where to go.
I think you’ll find they’ll quickly adjust to using the box provided it is big enough.
Are both rabbits sharing this cage?