Lawanda never actually got rabies. What happened was that Junior stole some rabies infected dog blood from an animal control truck and switched it with a blood sample taken from Lawanda, leading the doctors to erroneously believe she was rabid.
Cold River was the name of the town Ben Healy was originally from, most likely the same town the orphanage was in. In the opening of the film Ben and Junior decide to leave Cold River and move to Mortville.