With socialization, do you know anyone who would be willing to bring one of their horses over? Maybe if you have a nice enough set up you could see if anyone would like to split part of the hay costs in exchange for them keeping their horse at your farm. I'm sure there could be someone who just doesn't have the time or place to keep a horse that could pay you to keep there horse at your place.
If that's not a possibility, you could see if you could lease or borrow someone's horse trailer. Then you could set up a lesson or something to work with your colt and socialize him.
And as for the breeding, anything can happen. As soon as an animal can breed, they definitely will try. Just because there is a height issue doesn't mean they won't adapt. I've heard about Chihuahuas and Great Danes breeding, and they have a few feet in height difference in the dog world. Get him gelded or separate them, it's not really worth the risk. Alot of people think something like that won't happen, and the next thing they know their Australian Shepherd has a Shih Tzu puppy. (This happened to my friend's dog, but they were actually trying to breed Aussie pups.)
My gelding, who is now 6 years old, is a prime example of what can happen with an under socialized horse. He is really buddy sour, meaning he doesn't want to listen unless "his" mare is there. If she is out of sight, even a tad, he will throw an absolute tizzy. When he is with her he'll push her around, and bite her. Now he's gotten to the point where he won't go by mean ol' me because he doesn't want to be away from her. He will actually bite her but and herd her into the paddock just so he can check me out to see if I have food. For the love of god, do as much as you can in the way of socialization! Don't let them get buddy sour.