Wow, thank you for all the replies! I'll try to answer all your questions here...
1. For the gaps in the joints, I think the instructions say to use wood filler? So that's what I was planning on using. I've never done anything like this before, so I was just planning on going to Home Depot and saying, I need wood filler please! LOL
2. My daughter is 11 years old. The house will be furnished with Playmobil actually. Not your typical miniature dollhouse furniture. :-) But she already has all the furniture, just not a big enough house to put it in. :-) Hopefully no one here finds that offensive! LOL
3. For the floors, we were going to use peel and stick tile which we have extra of already from real house renos, cut to size for the kitchen and bathroom. It's plain whitish/greyish, no big pattern or anything that will look weird. I think it'll be ok. She wants carpet in the bedrooms so we were going to see if we could find something like a remnant with a very short nap to do the trick. And for the living room, we were thinking of trying to make a "hardwood" floor with popsicle sticks, stained. We are trying to do this so it's beautiful looking, but without spending a small fortune. :-)