Hi and welcome to Binky Bunny. Bunnies can be very protective of their pens or their areas, and they often don’t like hands reaching into their spaces, and may react to that with nips. It can also be scary to a rabbit when hands and arms are coming toward them, and again, they may show their fear by nipping. Also, he may have already claimed the sheet and he was mad at you for taking it away. But he shouldn’t be chewing on sheets. You will need to calmly work with him, sitting beside the pen and talking to him to calm him down. Don’t make any sudden moves into his pen/area, but do any work in his pen gradually, maybe even distract him with a treat. Keep showing him that you aren’t trying to grab him or invade his space.
If you are in the U.S., rabbits don’t need shots like they may in some other countries. A single male bunny may not need to be neutered, if you never have any plans to get him a companion, but neutering will very likely take away some aggression. Unneutered male rabbits can also spray or start humping people, and are often frustrated due to all their hormones. You will need to have a good, rabbit savvy vet for your rabbit, and you can discuss neutering with him or her.
Here is a link that has several articles on rabbit aggression that might be helpful to you.
https://rabbit.org/category/behavior/aggression/