I was wondering if there's such a script that takes a number of words,
and then does random sizes of the words and placed them horizontal/vertically like this background?


I thought if there isn't one, I'd try to write one..but i don't know how to handle the logical part of it? like how would it know how to fit the words into horizontal/vertical?

When you create a text layer you can obtain its size from which you can obtain the aspect ratio. Then your problem is tiling the area with rectangles having only these aspect ratios (or their inverse, when using vertical rectangles). Once you have all rectangles, you just generate the adequate text, scale (and possibly rotate) the path.

You can make the problem simpler by tiling with plain rectangles (forget the aspect ratio) and then figure out the text that fits with the least distortion (closest aspect ratio). See http://www.math.ucsd.edu/~ronspubs/82_04_tiling.pdf