My last bunny was a dwarf who lived to be eleven, and I must say that he did slow down a lot in the last year or so. I'm not certain, but it seems reasonable to me that a bunny could get arthritis.

Perhaps he would enjoy a blanket with a heat pad underneath it to relax on for a bit? My arthritic dog seems to enjoy getting his bad joint all nice and warm.

As for shrinking...I don't think they actually SHRINK, but my older bunnies all seemed to get a little bit thinner and just...have less presence I suppose. They were still their wonderful selves, they were just more interested in sleeping in a lap than in playing or exploring.