In SONAR 8, the checkbox to record Controllers is under Options > Global > MIDI tab, and the Prepare Using buffer setting is at the bottom of that same page. My guess is they will both be correct if you haven't been in there before.
Your sustain pedal should definitely remain plugged into the back of the RS-70. The pedal is just an on/off switch (in most cases); it's the keyboard that generates the CC64 pedal messages that get transmitted to SONAR.
From everything you've said, I'm pretty confident the sustain messages are reaching SONAR and getting recorded, and I can't think why the RS-70 wouldn't respond to them on playback if it's responding to note events.
In any case, I would not worry about installing Sustainfix; CC123 is not the problem.
At this point, you just need to check the MIDI message flow step by step:
1. Verify the CC64 controller events are getting recorded with values of 127 for down, and 0 for up, with the same channel as the notes (all this is visible in the Event List view menitoned previously)
2. The controller events are registered in the track's MIDI output meter on playback (you might need to record just some pedal events to be sure)
3. The pedal event register in SONAR's MIDI out indicator in the System Tray.
4. the RS-70 is receiving the controller events. unfortunately, yo're kind of out of luck here because it appears the RS-70 does not have MIDI I/O activity indicators. The evidence will have to be that notes are sustained as expected.
You're looking for something like this in the Event List: