dremer, you can also go into the features of wordpress and change how the pages are generated through the permalinks option. This is assuming that your server (apache) allows you to modify the .htaccess file and has the mod_rewrite option enabled. This shouldn't be a problem, if it isn't, just ask them since you're paying for the service. A little server knowhow and some coding in the apache program options will eliminate the linking problems. If is possible to construct a dynamic site this way and the public and search engine spiders will think it is a static one.
For the OP, I had a very bad experience with GoDaddy.com and their billing practices. It was a simple mistake on their end, but it took a BBB complaint for them to correct it. I'm sure this could happen with any company. If I were to host another site, I would go through a different domain registrar, there are plenty to choose from.
As for hosting, if you want to have total control over your site, renting your own host will be a better choice than forwarding your domain from a free host. You can get a better price if you pay for the whole year up front vs month to month.
They're not the cheapest server, but I have always had good experiences with phpwebhosting.com. They run unix servers loaded up with Apache2, Mysql, and PHP. Everything you need to run a very robust website. The servers are fairly quick and they are generous with email accounts and bandwidth allotments. For me, their customer service has always been excellent. Again, there is a lot of competition out there, so there are many good companies to choose from.
Whichever host you use, Wordpress is probably the best blogging platform out there. If you know nothing about web programming, there are plenty of themes for your site available to download. If you're comfortable with php, mysql, html, css, and javascript, you can use wordpress as a fully functional CMS for any type of site.