I've done spoon heeling but usually when the person cant bend or the puppy is eating their hand lol
Samba was talking about me (I think lol) since I am the friend on the board with a sheltie
With the sheltie I taught him the same a I start my shepherds, I just had to reach down a little more
I found in watching others with small dogs that they had the same problems you are running into, sitting too far out and/or really forging. So what I do is first build in muscle memory and rewards for where I want the dog with luring. I do luring for quite a while and gradually bring my hand up to my hip. I actually teach my dogs to forge a little because I prefer forging to lagging and I expect the dog to lag a smidge in compeitition due to stress and my nerves lol I don't really teach the sheltie to focus on my face, more my hip and as he grew to a barely within standard sheltie, my shoulder.
As I said, I start with luring the position. Exactly where I wanted him. I also make them reach up for the treat so they learn right off the bat how to walk with their heads up. I make sure to keep the dog in position and close to me. After luring for a while, I start to raise the treat between steps so that it is at hip level and I mark the dogs attention there and then reward.
When starting, I actually don't teach static attention at heel. *shrug* Just found it easier for me. I teach static attention once I have the dogs desire to be in heel position.
Next time Samba and I get together to train, I'll have to see if we can record a little to show you
Feel free to PM me to discuss further