i was in your same situation when i was making Julie's vivarium in the summer. i made it with plywood also, and then painted it with very low VOC fumes paint, to seal it from water, but i still didn't want Juliet trying to dig at the paint or the wood so at the paint store i went to, the worker there makes wooden toys for his baby grand children. so they dont digest the paint he coats them with shellac spray, so that's what i used, and coated the entire cage with. its super hypoallergenic and non toxic to kids or pets, and it seems to work perfect for me. i out about 3 good spray coats on then after it dried i washed the cage down with water and vinegar. and it works perfect!
http://www.homedepot.com/p/Zinsser-...nish-and-Sealer-00304H/100203332#.UoBAcPl4Km8
http://www.homedepot.com/p/Zinsser-...nish-and-Sealer-00304H/100203332#.UoBAcPl4Km8