1. 1/2 inch to inch thick, you don't need much as wheeleri don't dig as much as smooths especially it being a male, moreover they'll kick sand on their backs for camo. I'd put a lil more on the hide though so they can make a burrow temp trap. If female, you may need a little more if your breeding and having eggs.
2. I don't think its too large, I've read recommendations for shoebox size but a sweater box would be fine. Once they get comfy they will thrive. I keep all my nephrurus in v-35's hatchlings to adults. Once I get a v-18 rack I'll keep just hatchlings in those.