parotlet breeding

ive had my female parotlet for 3+ years, and my male for 2+, they are paired and I was wondering If i could breed them with a normal nest.

Sometimes my male (Marco) likes to get it off with my female (sophie). Is this a sign that they are interested in laying eggs? Also, if they do lay eggs, will I be able to keep the babies in the same cage even when they are fully fledged since it is a pretty decent sized cage. Thank you!