Will the 3 locations mentioned in the descriptions be the only places we can build?
Probably if they had more then 3 locations they'd mention them. The real issue is Skyrim's map is largely occupied so usable realistate isn't that abundent.
And I guess the pets the kids can have will just be dogs?
if it was just dogs I'd think they'd have said dogs. So I presume other pets may be available.