First off this article should help some as it is about your birds body language and most of us always benefit from this
http://www.birdsnways.com/wisdom/ww15eii.htm It is really hard to say which is actually going to work best for you and your bird. You don't want to be chasing him down if you can avoid it. Most birds seem to do better with some time out of the cage, even though there has not been enough of an opportunity to establish any type of schedule with them. Schedules and keeping to them are very important to most birds and from what I understand it may be even more important to a cockatoo than with some of the other, smaller species of parrots. Perhaps you could let him out for a couple of hours to hang out on his cage in the mornings after his breakfast and then let him on the floor for another couple of hours in the late afternoon wherein he is out but sees you place his dinner in his cage and use this as a cue for him that it is time to go back in. As in everything else with parrots what works for one may not work for another one, this is because each one of them is unique. So you are going to have to see what works best for you and him on this one.
All of my birds were older abused adults when they came to live with me and letting them out right away was the best possible thing that I could have done for some of them and with a couple of them it was a huge mistake and set us back on earning trust. If yours stays relatively calm as well as happy with the time out it may be the best thing to do, but if you have to run him down then I would wait a little bit on it.
This is actually a very important time in the formation of your relationship and it seems that everything that you do or don't do has an impact on it that is not always apparent right away. It seems to me that both feeding times as well as their actual diet is one of these things. Bribery can be a powerful influence in getting their cooperation as well as their trust. This species of parrot has a difficulty in metabolizing fats more than other species, with this in mind morning feeding should probably consist of more of the fresh foods such as fruits and vegetables and whole grains and then limited amounts of foods that are higher in proteins and fats for the evening meal. This can be used to help you get your bird back in his cage for the evening at dinnertime as most parrots want the higher fat and protein foods to a greater degree than the other foods, It is as if these foods are like ice cream and candy for a human child. That means he will be more willing to go back in his cage for this food than other types.
I am not sure that I explained this adequately in a useful form, but if not I will be happy to try again.
but he still does not like being handled. But i guess he is getting use to my hand being around him. When i first approach he takes a few steps back then steps towards my hand. But he loves nibbling on my hand the same way he does with a seed, not that it hurts but i think its a bad habit and im unsure how to deal with that, i dont want to pull away so he doesnt get scared.