He does look like a lovely boy. My opinion is two parts:
1. Are you going to show him, and what are his bloodlines?
If he has excellent/great/good bloodlines and will be aggressively shown (hunter/jumper/dressage, etc.) then YES. Keep him as a stallion, as his value will probably increase if he proves to be an excellent show horse.
If someone where to walk up to me and say "I have a rescue (or) off the track stallion. He's papered with pretty nice lines, great tempermant, and shows great potential as a Dressage/Jumper/Hunter/Eventing horse. Should I geld him?"
I would tell them NO. TEST him first, and if he proves worthy, let him keep the family jewels. If he proves to be unworthy, stupid, completely harebrained...snip him. You'll have a fine little competition gelding.
2. If you are NOT going to show him as his bloodlines are POOR.
Then GELD. An unproven, unshown, OTTB stallion is pretty much worthless. To be perfectly honest, any
unproven, unshown stallion is worthless. I don't care how pretty, how nice the lines, how mellow the attitude, how beautiful the offspring, if he hasn't proven himself, he's not worth more then your average trail gelding. If your breeding for family and trail horses, then great! But if your breeding for competition or show....I suggest a little snipping.
Better off a gelding then an unused stallion that can possibly cause a Whoopsie!
For the Appendix foal, if you think he compliments your mare nicely, go for it. I have two geldings out of unshown stock and they are EXCELLENT for what they are bred for-long, hard, trail rides. If your breeding for competition, and feel that the pairing would produce a competition minded foal, why not?