I'm not entirely sure I understood what it is that you want to do. Since your blog is private, I can't see it.
Do you want to eliminate the navbar at the top? You can do so by creating a Custom menu, leaving it blank (i.e. not add anything to it) and then setting it as the Primary navigation under the Theme Locations.
Pages are for static content (like an "About" page), not dynamic content such as blog entries. Are you wanting to have your Categories appear as "Pages"? If so, you should read this entry by Panos http://wpbtips.wordpress.com/2010/06/30/posts-on-pages/ and then add another Custom menu, give it a different name than the one you used for the Primary navigation (such as "widget", and after you've saved it, use it in the Custom Menu widget in the sidebar.