Your situation sounds so close to what we experienced when we adopted Dany (except she was rescued by the local humane society). Dany didn't understand praise, or the word "no", she didn't know what a toy was or what treats were. She also wasn't housetrained, among many other things. So, as far as the treats went, we had to use tiny bits of cheese and hot dogs. She finally understood what treats and toys were, but it does take time. She also definitely knows what praise is and she basks in it on a daily basis.
Dany is approximately seven years old and she was spayed and some teeth were removed. She came through it just fine, although for about a month she could only eat dry food mixed with wet food, probably from some mouth discomfort. We feed according to the package directions. We free feed (giving one day's worth of food and replenishing in the morning). Addie (other yorkie) won't eat otherwise.