Hi, welcome to LQ
Linux modules (drivers) are sometime tricky to install because they need to be created for every single distributions (not 100% true, but close enough). In your case, the distribution you try to use is not directly supported. I am unsure if that one is based on Ubuntu or not. In any case, you need to install the build-essentials to be able to "fix" those issues. But my first question would be, why puppy? This distribution is designed for old hardware in mind. Is it your case or you just like the look of it? For the later, it might be a better idea to do with more mainstream distributions like Ubuntu or OpenSUSE and install similar environment and skin on them. As for /usr/src, you can create the folder with "sudo mkdir /usr/src"