DON'T put it on the inside! you'll never get every little pokey bit smooth enough not to stab or scratch, and that stuff will hold pee & germs. They'll run around and want to climb, if they get poked or even scratched with that stuff they could end up with a costly & painful infection or abscess.
Also, that stuff is fine on the outside of the cage short-term til they grow if your bars are too wide, but it absorbs pee smells and you can't get it clean, it will be full of germs & stink in time..
If your kids are small you're better to save your energy and spring for a smaller closer-barred cage til they are safe in the ferret nation..