He will get used to you leaving. It may take a while but what are you going to do? You have to go to work. As long as he gets plenty of attention and exercise when you are home he will be fine.
Personally, I hate the idea of them locked in a crate all day so I say stick with keeping him in the kitchen. Even if it took me longer to housebreak mine, I would still do it that way.
If he is sleeping through the night without accidents, then it's fine he is in the bed with you. The crate forces them to wait until you take them out to go potty but he is waiting and making it through the night on his own. If it ain't broke, don't fix it.
Keep practicing sit but start to teach him another trick. If you think he is getting confused give it a little more time but he is probably ready. I laughed when I read he is sitting before you tell him. Gus did that and for a little while he thought everything I wanted him to do for a treat was sit. Your puppy is probably starting to think the same thing so it is probably a good idea to start a new trick so he learns the difference.
Hey, I just noticed you have a Gus of your own.