Hi @Alice-and-Jeff0, congratulations on the new puppy! I've had a similar situations a few times when doing last-minute dogsitting for friends. It's absolutely the right thing to do to contact all of the guests directly to inform them of the change in circumstances, since you never know when the presence of a dog is going to change the situation. (Most of the time it won't, and some guests will be delighted to have an adorable puppy around).
However, I also think you'll have to be prepared to offer guests the opportunity to cancel their bookings and waive your cancellation policy to fully refund them, no questions asked. About that last part - I don't recommend asking guests if they're allergic to or afraid of dogs; from their perspective, they have a right to object to the conditions of the household being different from the ones advertised, and shouldn't have to be put on the spot to justify those objections.
While it's generous to offer to kennel your new dog, I'd be concerned that this could cause the puppy a lot of stress and confusion while it's still in the process of adapting to you and your home. It's also a lot to put on the guests - knowing that they've caused you to take an extra expense and separate you from a member of your family. Guests who would prefer not to share the space with a dog are best off cancelling - especially the ones with allergies, who might experience problems even if the dog isn't in the house.
Also, I'd suggest staggering the times that you contact guests. The ones arriving in the next weeks should of course be contacted immediately. However, you'll need to see how your dog interacts with guests and whether any unexpected behavioral issues come up, before contacting guests booked further in the future. That way, you can give guests a well-informed idea of the puppy quirks and potential annoyances.
Finally, if you haven't done it yet, be sure to feature the dog prominently in your listing! And of course a cute puppy pic is welcome here too.