Looking for some advice on what backband to get for a sit in kayak. The temporary foam I put on the rear cockpit edge in not working out. See photo. There are so many backband options I don't know where to begin and most seem to be for sit on kayaks. Hopefully someone can recommend a backband in the $50 range. Tips on what hardware is needed to attach the backband to the kayak will help.

Most backbands will need 'cheek plates' installed in the boat - usually plywood pieces that run vertically from hull to the underside of the deck, though there are other ways which attach to the deck underside. You'll also need some pad eyes or similar behind the cockpit to hold up the backband.
Again, if it were my boat, I'd get paddling it to see if it was worth the work. Just jam a block of foam behind the seat as a reminder not to slouch.

Also need a seat. Have been advised to carve / sand a seat from Minicel closed foam but not up for that. A commercially available Minicel seat would work best for me.

Something like the foam 'Happy Bottom' seat or similar would work, and if this boat doesn't end up as a 'keeper' you could put the seat in your next boat....
http://www.clcboats.com/shop/products/boat-gear/kayak-seats-foam/happy-bottom-pad-kayak-seat.html
http://www.clcboats.com/shop/products/boat-gear/surf-to-summit-kayak-seat-grande.html

The problem with some foam seats is that they raise your butt off the hull more than necessary, reducing the feel of stability. That said, having your butt higher than your heels is generally accepted to be a more efficient/more powerful paddling posture, I think.