congrats on your new baby!!
if she is already going outside, then I would keep taking her out to avoid confusion. I have tried the pee pad thing and it didnt work out for us and yes, Tucker started using blankets, towels and any clothing that was on the floor. That is one of the main reasons why I started him outside. It took along time but he at 6 months old has finally got it. I know that some people on here have had great success with pee pad training so maybe they can help you out more.
. Regardless on what method you use, you have to be patient and consistant. Find something that works and stick with it. Lots of praise goes along ways and if all else fails, use treats!!
good luck!!