As long as it seals well to maintain humidity, the amount of cedar is really up to you. The cedar does help to maintain humidity, and provides that aroma that we all love. I recently built one into a space in my bar, and I lined it completely with cedar. Probably overkill, but I had the cedar and wanted that look.
I would not rule out glue. I glued my cedar in place and it is working out fine. There was a thread on here recently with some links to articles and such explaining the effects of gluing it in place. The biggest concern was that you do not want to trap moisture in between the layers.
Just my 2 cents. There are a lot of people on here with much more experience who can add some input.
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