How to prepare poster paper for conference that rejected full paper
I've been involved in a number of conferences that offer posters to rejected papers as well as other newer work that wasn't ready or acceptable as a full paper.  Usually they don't publish short papers in a proceedings, though some do, as in this case.  I think presenting a poster is indeed a good way to get your work out into the community and get feedback.

The poster is not usually "reviewed" in the usual sense and the bar is typically pretty low.  So if the conference said "this might make a good poster" then it probably will.  


  Considering I have plans to publish a longer paper eventually, how should I go about preparing this 3-page (IEEE 2-column) "poster paper"? Shall I keep it more textual and keep the model / results in the poster? Or put the model with preliminary results in paper and all extra material in poster?


Regarding the question of what to put into the paper, I suspect some may want to close this question as depending on personal circumstances, but I will try and give more general suggestions.   I would not recommend putting results in the poster and not the paper.  That seems wrong to me.  Just like with a full-length paper, the paper and the presentation should be roughly in sync.  

I'm not clear on what "all extra material" refers to.  

In general, treat your poster as an advertisement for the work and for people to read the paper (even if it's abbreviated).  There should be more material in the paper than the poster, not the other way around.