One of the most common mistakes with lure training is not fading the lure properly.
You should only use "food in hand" for luring the sit for three successive (and successful) sits. If they try to grab the food or stand up, don't give the treat, WAIT or re set up. The puppy will eventually sit, when it happens, reward the puppy but only if bum is still on the floor. When you get three in a row, have the treat in your other hand and use the exact same hand movement to get the sit, treat from the other hand. After you have success with this you make the movement smaller, still treating from the other hand or your pocket or a bowl sitting next to you. Then you can add the verbal cue. It goes like this : word "sit", hand signal, reward. Once you get a consistent sit her and do at least ten reps you try with only the word (this is how you see if the pup knows the word) if he doesn't sit go back on step and try again. Keep in mind that this may have to be done in several small sessions if pup gets tired. Also keep in mind the treat reward should only be about the size of a large pinhead. Really. THey work more on smell than visual so if its a decent treat (smelly!) you don't need much at all.
Using the treat too much for luring, always rewarding with a treat on a LEARNED behaviour (instead of going for an intermittent reward) is how people end up with dogs that will ONLY work with a lure and why people have misconceptions about treat training. Dogs that will only work for a treat as older pups do it because the training methodology was wrong, not because the food is the issue.
Red, that's an awesome video..she's a BEAUTIFUL PUP!