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ii-V-i confusion

No, not really. Steve CS explains it above, but just to stick my oar in, you're conflating two different things: construction and harmonic function. Strictly speaking, "dominant" is not a flavor of chord, the way major and minor and augmented and diminished are--though as Steve notes it's sometimes used that way, often to distinguish it from a maj7--it's a description of what the chord is doing harmonically. "Major" strictly refers to the way a given chord, regardless of context, is constructed. So a major chord is a major chord regardless of whether it's the tonic, the subdominant, or the dominant at any particular point in the harmony. Thus, a G7 in the key of C (or C minor, for that matter) is a major chord with an added minor 7 that serves a dominant function. And it would have that dominant function even if it didn't have the added F and were a simple G triad.

I guess I internally include 7ths(or 6ths) on every chord whether or not someone is playing it and I separate chord types to help me navigate lines. But I understand what you’re saying!!
 
I can't recall offhand how this proposed system referred to dim7 and m7b5 chords, but I suppose that logically it would have had to be something like "diminished diminished 7" and "diminished minor 7," respectively. There's something to be said for tradition and familiarity, for sure.

It is a tricky one, that's for sure. In particular if extracted from a true 8-tone diminished scale where the °7 is enharmonically a major 6th. I guess the convention is at a state where everyone understands it sufficiently to get by without adding layers of detail that would take another 100 years to be argued over, accepted and established. I'd rather just be playing at this juncture.
 
Here's the simple answer: Play a ii-v progression on a keyboard or guitar and see where your ear wants to go for the next chord. Now play a ii-V progression. Hear the difference?