1. my question is how can I determine my shipping cost without knowing where my product will ship to before it is purchased?
You can't. It depends on location and you can't predict where your customers live. You can either choose a zipcode far away from you, which will give you a price that covers every possibility, or you can enter a close zipcode and then a far zipcode and use an average.
2. how I can ship through USPS WITHOUT using those ugly flat rate shipping envelopes/boxes
You can ship in any package, even a coconut. True story, I've received one. Truth is, the Flat Rate ("if it fits, it ships") boxes are a rip-off UNLESS you are shipping very dense/heavy objects. Otherwise they cost far more than regular Priority envelopes/boxes. The benefit of regular Priority packaging is that it's free (go on USPS.com to order packaging which will be sent to your home for free). However, if you hate the look, no worries, you can ship any kind of box/envelope you want PROVIDED it fits within the USPS guidelines (as Jessica said above).
3. Also, is it possible to track packages through USPS?
Yes, all Priority shipping through Etsy automatically gives you a free tracking code. Same with Express. Not available with First Class.
Erica, shipping is complicated. I'm part of a beta test to offer multiple shipping charges, so I've spent alot of time (many hours) researching all of the options, US and international, and what I found works best is to make a spreadsheet of your popular packaging weights/sizes, then use USPS.com to figure out the best rate for each possibility. That way, you'll offer your customers the most accurate rate, and not get yourself hurt by undercharging (which happened to me alot in the beginning...and I'm still new at this!)
PS: anything weighing UNDER 13 ounces goes First Class, anything OVER 5 pounds (or very large) you are usually better off using FedEx or UPS instead of USPS...USPS has an enormous upcharge for boxes with a combined length/width/height over 84 inches