You'll still need to treat the dad too, even if they are separated. It's hard to know if putting the baby in the cage would be good or not. It depends on a lot of factors. Does the dad attack the baby, is the baby stressed being around the dad or do they like each other, lay down together, and groom each other. Are they bonded? If they are, it could be stressful for the baby to be separated, and that wouldn't be good. If they are still going to be put together after the baby's better, and as long as they like each other and the dad's not attacking the baby, you may just want to keep them together after you treat them both for the mites.
I have no idea where you could get hay around there. Here in the states, there are a few options depending on where you live. Pet stores will alot of times, have small bags of grass hay. If you have a walmart with a small pets section, they may have some. There are horse feed stores here that carry large 50 lb. bales of hay for the cheapest price. If you can find a horse stable, they may sell you some. You want a grass hay like timothy, orchard, costal, bermuda, something like that. Try to avoid grain type hays like wheat, rye, etc. If you can get a hold of a bale, then that would probably work the best for the buns, but you would have to have a way to transport something that big.
Some rabbits really like toys. You can use things as simple as an empty toilet paper roll, cardboard boxes that they can rip and chew up, newspaper and old phone books for ripping apart, dried hard pinecones, willow tree or apple tree branches to chew on, wiffle balls, fleece blankies to dig and bunch up. You just want to make sure whatever you use is rabbit safe.