I am so happy this poor mama dog has found such a great caretaker (your niece)! This will be a very good experience for your niece too, and I am surprised to hear how maturely she is handling it (telling her friends they can't have the puppies in a creative way). She should be very proud of herself.
Can't wait to see puppy pictures. This breed has already been done though, "Goldendoodles". These would be mini Goldendoodles. I'm not into the designer, cutsie names for dogs that are essentially glorified crossbreds, but there ya go.