Your cat is fine! He's sitting like that because he's weird and that's just how some cats prefer to lounge. He's very relaxed and happy, his ears are up and alert and his eyes are bright. Cats express affection in different ways than dogs. Let him come to you and let him pet himself on your hand to get a sense for where he likes to be touched. Cats don't generally like rough-handed play or pets, so be gentle till you learn his boundaries. If you'd like to really make him happy, you can wait to see if he looks at you and blinks slowly. Do the same back, a slow blink, then look away. That's cat code for "I like you, I'm comfortable." Cats make biscuits and purr when they're happy, especially on plush blankets. Good luck with your funky little man!