lol. I'm sorry I know your sincere but you paint a picture so well and its downright funny to imagine a little puppy tugging on your pants.. lol
Ok. I have a collie myself. Though thankfully she's not that agressive in her herding instincts.
You got her a bit young. Puppies should not leave the mother till at least 8 weeks and preferably 12.
I think your doing the right things. When she bites, hold her mussle and say NO BITE. Try to divert her as you've done. Remember she is only 7 weeks. Persistance is key.
When she wants to bite, don't pet her. Remove her to cage for 5 minutes. Then bring her out, try to pet, if she bites, put her back in. Keep doing that till she learns that she can only have attention when she is not biting.