Here is how I do it....
Puppies stay in the whelping box with mom until about 3 weeks. On the 21st day, they come out to explore. I use an exercise pen to put them out on a safe (read bleached) surface if the weather is nice outside.
By about 5 weeks, they are spending a good amount of time outside playing in a safe area if the weather is nice. They are still with mom, and in the box with mom at night.
I let bitches handle the weaning. The longer on the bitch, the better for the pup in my opinion.
I NEVER let puppies go before 8 weeks, and I prefer TEN weeks of age for going home day. It lets me have a couple more weeks to evaluate puppies to make sure I"m putting them in the best homes for them.
I have had puppies still nursing occasionally at 10 weeks often.
I do make sure very early that the BITCH has the ability to get away from the puppies if she wants to. This way SHE can control the amount of time she wants to spend with the puppies, and if they get too much for her, she can retreat.
A half gate about 18" tall usually does the trick nicely. She can hop over, they can't.
As far as bedding, I do not use shavings with puppies ever. Too hard to find all the messes and keep them clean.
I use blankets over newspaper in the box, and when they graduate to the ex pen, I put a newspaper area in one corner of it. They learn to use it quickly.....