Hi Woody – adore the photo!!!!! My bun is free range too and yes his house (cage and the rest of it, ha ha ha) is purely for his food, toilet, etc., and yes he sleeps in there at night (cause he wakes me at 4 every morning when he’s not put to bed). My bun sleeps on newspaper/catalogues on the bottom of his cage. He also has a tray of hay which I see him lay in after grazing, but even when I wake through the night to make a cuppa (yes, he is located in my kitchen/dining room) he’s always on his newspaper floor. Through the day when he naps under my bed, he sleeps on the cardboard boxes, not the carpet. Go figure? If where you are located it is warm (I’m coming into summer here) do away with the blanket, but if your coming into cooler weather, maybe keep the blanket for him to snuggle into when it gets cold? Sorry I can’t be of more help, only had Henry for 6 months and he is still teaching me! lol….