The big error in your reasoning is that you're viewing the monster advancement HD in the monster manuel as if it were a class. That the creature if it gains exp would progress along this "animal class". The manster advancement was never meant to be applied progressively. You were never ment to take a normal wolf that interacted with the party, and then use the monster advancement rules on that same wolf. The advancement rules are there so you can quickly and eaily throw "super-wolves" at them. The advancement is not a class, its just a tool for DMs to beef up wolves. Not beef up Jimmy the wolf.