Great pictures! I have had the pleasure of watching a couple of former puppy mill dogs learn to be pets. We "fostered" one for almost 13 years :W Our Pistol Pete (AKA Sweet Petey) was so pitiful that being part of his transformation was life changing. Puffy's body language looks good at this stage, standing up and making eye contact is huge for these dogs. It was MONTHS before Petey would do that, he literally crawled on his belly and then would "shut down" and lay very still when overwhelmed.
The dogs you have in your home will help teach this new one to be a pet. These dogs, that were once nothing more than abused/neglected livestock, need time to learn to trust humans. Typically they learn from other dogs more quickly.
Thanks for giving him a chance to be a pet! I am sure you help teach him what love & patience is, so that he can thrive.