Let me second the crate training idea. I’ve successfully raised dogs all my life, and crate training is much easier on both you and the dog than trying to teach the dog that the entire house is her ‘den’ and must not be soiled in or destroyed.
Basically, you buy a dog crate large enough for the dog to be able to turn around in when fully grown (you’ll use this crate for the life of the dog - it’s not just a ‘training’ thing, but a home for the dog in the house, plus a place to put the dog when guests come over who are allergic, or little babies are crawling around or you just need the dog out of the way).
When you crate train the dog, you are relying on the dog’s desire to not soil where it sleeps. They have a very strong inhibition against doing that. So when you feed your dog, you take it outside immediately after and give it a command to ‘go’, like “Hurry up, go pee”. If the dog does its business, praise it like hell, and the dog gets to run free in the house for a while (until you think that there’s even a remote chance that it might have to go to the bathroom again). If not, the dog goes in the crate. Take her out in half an hour, give the same command, and wait a reasonable time. If the dog still won’t go, it’s back in the crate, and repeat as needed.
Basically, you are simply never giving the dog a chance to have an ‘accident’. After enough time, the dog will pick up the notion that the house is not the place to go, and your job is done. But you should still crate your dog if you are out of the house, or while you are sleeping.
Don’t let kids play in the dog’s crate, and don’t crawl in yourself, especially when the dog is in it. The crate is the dog’s ‘safe’ place, where it can feel comfortable and protected. Dogs in the wild are den animals. If they aren’t in their den or with their pack hunting, they will feel a lot of anxiety. So crate training is not cruel - in fact, leaving the dog alone without a crate or a doghouse may be cruel if the dog suffers from ‘separation anxiety’, which is one of the prime reasons why some dogs become destructive.
You’ll probably find that over time the dog actually likes being in her crate. When my dogs are fully crate trained, I leave the crate in place with the door permanently open, and the dogs often just make their way to the crate to sleep or just to get away from the hubbub of family life. They really do learn to treat it like their ‘den’.
A dog that is crate trained and trained to relieve itself on command is much, much easier to live with, which means that you’ll probably do more things with it and treat it like more of the family. That’s good for the dog. We travel with our Border Collie, and when we pull over into a rest stop I can just let her out and say, “Katie, Hurry Up” and she’ll pee and/or poop within about 20 seconds. That keeps the dog comfortable and keeps me from having to stand around outside for 20 minutes while the dog sniffs around and explores. And since she’s crate trained, we can even take her with us visiting relatives, and put her in her crate for the night or when we aren’t directly supervising her.
I also strongly recommend socialization for the puppy. It sounds like she’s a little agressive and dominant, which means she needs to learn who’s boss. So get her to ‘puppy kindergarten’ where she will have to learn to listen and obey you in the presence of other puppies, and she’ll also learn that dogs aren’t scary so she won’t become either dog agressive or submissive when she grows up.
At this age, you should also be exposing the puppy to as many different people, sounds, textures, and environments as possible in a positive atmosphere. If you don’t do this now, you may wind up with a dog that is permanently fearful of strange things like walking on wood, or going under things, or other people, or children, or blonde people, or whatever. Puppyhood is when they learn what is safe and what is not - expose your puppy to as much as possible.
Most people don’t put nearly enough effort into the first year of their dog’s life, and as a result the next 12-17 years are much harder than they need to be and far too many dogs wind up by themselves in the backyard dog run, which is no way for a social animal to have to live, or even worse, in the pound.
All my dogs go through a similar routine in the first year of life - they start out being crate trained, then at 12 weeks they go to ‘puppy kindergarten’, which is kind of like early obedience classes for a puppy where the emphasis is on socialization, exposure to lots of things, and comfort around other people and dogs. The instructor will encourage people to bring their children along so the puppies are comfortable around kids.
After puppy kingergarten, it’s at least Obedience I, where the dog learns to walk properly on leash, off leash, to sit, stay, etc. A dog that can’t be commanded to sit and stay sitting regardless of what’s going on around it isn’t under control, and can’t be taken off leash. You should be able to tell your dog to sit and have it sit there for 10 minutes no matter what happens around it. And your dog should always, 100% of the time, come to you when called.
Once you’ve achieved all this, your dog is trained and ready to join family life as an adult dog, just like graduating from high school. Then you might want to do specialized things like Flyball, or Agility, or Schutzhund, but it’s not necessary, and you can just live with your dog and have fun. But go through the obedience rituals semi-regularly to keep the dog ‘tuned up’.
If you want more info, find out where a good dog training school is, and enroll the puppy in kindergarten. The instructor should be able to give you all the advice you need, including help with very specific problems.
You can find a good training school either in the phone book, or you can ask at a pet store, or call the SPCA.
Oh, and get rid of that ‘pee pad’. NEVER let your dog go in the house under any circumstances. Paper training is a bad idea too. The dog will smell it through the house, and it may become impossible for the dog to figure out that the house is not a toilet. And if the dog does have an ‘accident’, get some good pet odor remover and make sure you clean the area up. If a residue of odor remains, the dog will probably want to go in the same spot again.
If you have a hard time getting your dog to tell you that she needs to ‘go’, here’s a trick we learned - go to Radio Shack, and buy a little alarm that hangs on the doorknob. They can be set to either go off continuously when nudged, or just beep a couple of times. Ask the dog, “Do you have to go outside?”, and then take her to the door. Nudge the thing so it beeps, and then take her out and give the command to go to the bathroom.
Eventually, your dog will start going to the door when she needs to go out, and she’ll accidentally nudge the thing. When it beeps, come running and say, “Do you want to go outside?” then take her out. My last dog learned this trick incredibly fast, and when she had to go to the bathroom she’d just run to the back door and bump the alarm with her nose. Some dogs just don’t want to learn to bark, so this is a good alternative. Some dogs naturally learn to bark when they want something (my current dog does this), and so the little alarm deal isn’t necessary.
Hope this helps.