I cannot seem to be able to figure out where the "by ____________" is coming from under each blog post. 

I would prefer the display name be used in that field, not the username.  Since I am host, it just shows every article as being "by host...."

I changed the setting under blog settings to use Full Name instead of "username" but that didn't make a difference.

Help?!

Some people might advocate that the "host" role be reserved for administrative purposes... I kinda subscribe to that philosophy.
Might I suggest that you create another DNN role and post under that account, or, if you just can't stand not being the super- create another superuser account, and post under that account...

I think that the default "host" account is constrained to some degree in the manner in which it can be referred to (as in your instance).

FYI on my 4.7 install It uses the First and Last name fields for the "by line" not the display name. 

However display name is used for comments.