The best person to tell you what to do is the vet.
My 12 year old Golden also has arthritis. There are many medications that help: glucosamine/condroitin, organic flaxseed oil, Rimadyl, etc. Fatty tumors are very comon in older dogs, usually they are not dangerous and they don't need to be removed unless the vet becomes suspicious of the nature of the growth. All they have to do is feel the area and they know where to go from there. My dog had several removed because they had become too large, but they were all just fatty tissue.
Unless the pup is in unbearable pain, arthritis in not a reason to put a dog to sleep.
I hope you can find some help soon.