If you’re developing from scratch I recommend you leave Apache out of the picture entirely and use script/server to develop.
Read the excellent Agile Web Development with Rails to learn how to build your first app. It’s a must read, and is something you will always be referred to when asking questions here.
When it comes time to deploy on Dreamhost, it’s not a trivial task. Dreamhost has a wiki page for Rails that shows how to do it (and how complicated it can get.)
There are better hosts available, but you can research that later. Focus on building your app locally. Once you understand how Rails works, deployment becomes easier.
And don’t forget to ask for help!