It looks pretty bad still, but animation is a whole 'nother can of worms. I do have a few questions though to help you better.
Do you want the animation to look good, or just serve it's purpose to make things look like they move?
Do you want the squirrel to be more animal or human like? If he's more animal like, a squirrel run cycle, (go outside and watch squirrels) would be far more pleasing on the eye and accurate. I've never noticed them walking upright, although there was this one smoking a cigarette......

And one last comment, keep it up!