They'll pretty much find their way through any hole size. Honestly I don't think ventilation is necessary; a loose fitting lid and periodically opening it up should be adequate. I have long since switched to a container with no ventilation or drainage, and the worms are just fine. I think the way I started this out is almost laughable.
Once the substrate was established, meaning there was plenty of microbial activity and decomposition going on, the worms stopped escaping almost entirely. They still climb the sides at night (they are nightcrawlers!), but its been a while since I've found any dried up carcasses on the floor.
As far as breeding goes, they are fairly consistent as long as ample food is provided. They don't mind a substrate like coconut fiber as long its mixed with plenty of 'edible' particles. Shredded cardboard and leaves are good amendments to serve this purpose. Fruits and vegetables that rot quickly should be used (avoid carrots and lettuce new setups). I have found that powdered dietary supplements (like that nasty organic stuff that people put in smoothies,or 'Superfoods') including ground up nuts and spirulina powder work VERY well as food for these worms. But once things start decomposing, almost anything works.
These worms are very moisture tolerant as well. I've kept their culture at an almost 'mud' moisture level for prolonged periods and they were just fine. There's even a small population living in the substrate in one of my planted aquariums. So don't worry if your newts fail to eat them.