The 1000 Justsu is likely an exaggeration. Its kinda like a legend who becomes famous and who's feats eventually outweigh the actual achievements. In this case, Kakashi is kind of like a living legend. Maybe he copied 50 jutsu or something, and it was blown out of proportion. When it comes to why he never really used his copied justu... well it was because they are all way outclassed by the time part 2 rolled around.
The biggest loose end is Orochimaru's true reason for attacking the leaf. Kishi teased us with the concept, and never delivered.