*disclaimer - I don't actually know a lot about this stuff :D
Okay so if I were you I would ignore my parents because quality over quantity.
Anyways, I'd say edit the entire thing until you think it's good enough. (And you have to focus on your thing. If you really want to publish, then you'll have to prioritize it and think about all your other books later.) You are your first editor and before you show it to anyone else you have to make sure you are absolutely pleased with the draft.
Then for free editing, I'd say ask a few people you know. Teachers, friends, MBers, try to get as much input from others as possible. They'll see the draft differently and give you suggestions.
Then you could use their suggestions and edit some more, or you can skip to finding an actual editor. NaNoWriMo has lots of affiliates and I'm pretty sure some of them offer free editing from editors, or a free copy of your book but idk you'll have to check.
Sometimes you can even contact actual authors through social media. I know Cassandra Clare has a Tumblr and sometimes she answers questions from her audience. I once saw a really informative post about how she gets her money fro books and publishing process, so yeah you can try that too.
Also about pen names, you'll have to weigh the pros and cons and decide. There's a bunch of sites out there that could help you. I know JK Rowling used JK because she thought that if people saw it was written by a woman, they wouldn't read it (boys), and I know she also writes under Robert Galbraith so yeah :P