Thye both look adorable. I grew up with a collie (Shep) and I have such wonderful memories.
I hope he can get over his fear of children soon.
As for weeing in the same spot all this time this is hard to get over as they smell where they've been before. Have you got some strong smelling disinfectant to overpower the smell.
We had of spell of this with our dog when she was younger and only got over it by over the top praise when they went outside for a wee - if the neighbours had heard they would have thought the dog had just completed their first novel!