So I understand Halbach arrays are like one directional magnets

Not really. It's more like they're multiple magnets arranged so that the fields augment on one side and cancel on the other. You may be surprised by how much force it takes to cram the magnets together this way.

we're going to be making the track by wrapping Litz wire around it. What I don't understand is how this helps with induction currents? Litz wire is wire made of smaller wire, and the smaller wires are insulated from each other within the larger wire.

Same reason the core of a transformer is made of thin slices of steel instead of a solid steel donut. Eddy currents. You want to minimize these. The easiest way is to make the metal that you're inducing current in as thin as possible without increasing the resistance too much. Hence slices or thin wires.

However, doesn't soldering the ends together to make the loops short all the individual wires together?

Yes, but only at one place in the loop. Also, you want a large current to be flowing around the loop as a whole. Because the larger the current, the greater the magnetic field strength.

TL:DR How do induced magnetic fields work?

Miracles everywhere in this relativistic electrostatic bitch.

I've got a big magnet travelling down a rail. How do I induce the greatest magnetic fields?

You use as strong a magnet as you reasonably can. You get it as close to the loops as you reasonably can. You make the loops out of stuff that will minimize eddy currents as much as possible. You move the magnets past the loops at the optimal speed (usually pretty fast).

Do they need loops of conductive material?

Yes, they need to inductors. So loops are critical.

Isolated loops?

There are too many possible ways you might mean that to give a yes or no.

Long loops short loops?

The optimal geometry will depend heavily on the kind of and arrangement of magnets you plan to run past them. So there's no easy answer to that question.