As a first time male Yorkie Momma and a senior, Charlie wears a belly band when I am at work, and when I traveled to my daughters home this summer, he wore one while we were in the house.
As for the smell, I do know what you are talking about because Sophie would pee, and I became lax about having her wear a girlie pad during the day. Once they leave their scent, it is all over.
However, here is a link
http://www.dogchatforum.com/dog_urine_odor.htm and it really works. The vinegar is initially strong, but does the trick. Follow through with the entire process, saves money and they don't return.
Your rug is probably soaked through to the pad and installation of new carpet is the only remedy to remove the smell and be clean for the baby.
Good luck and please think about the belly band. It is easy to make, strip of 4" double wide flannel, velcro on each end and measure the circumference of your pup's belly with enough overlap to accommodate the pad (I use incontinence pads) and velcro. I made Charlie's in less than 5 minutes. Honestly, you will sigh a great relief to not have to worry about marking.
Warmly, Deborah