I had a dog with a torn ACL, and it's terribly painful. I am not at all impressed with your vet. The inflammation should be treated with something like rimadyl or deramaxx.
Our dog's torn ACL did not show up on x-ray. Soft tissue injuries generally require an MRI to detect. We tried the rest and anti-inflammatory route for two weeks. No change so we took her to a specialist hospital for an MRI. The ACL was completely ruptured with the two ends shredded and no connection existed. There was no chance it could have healed on its own. Ever.
She had TPLO surgery and within a month you would never have known she was injured. Without the surgery, she would have been a 3-legged dog for the rest of her life.
Do yourself and your dog a favor and get to a different vet tomorrow.
I am surprised your vet didn't suggest any pain or anti inflammatory medications, as this must be painful for her. Also NSAIDs may help the healing process by reducing inflammation. But do not use human medications for this. You would have to speak to your vet about it.
Surgery is usually recommended for a torn anterior cruciate ligament.
Other helpful things are : Glucosamine and Chondroitin supplements.
It could be that as a female dog squats to pee, it is too painful for her knee for her to empty her bladder, and so she retains urine to the point where she goes to bed not having emptied her bladder properly. Keep an eye on that, but I wouldn't recommend withholding her water. Make sure she has ample opportunity to take a slow gentle walk outside just before bedtime.
Rest obviously will help. But she will need only very very short walks outside to pee and do her business. Those little walks should be all the exercise she gets, and she should be on the leash, as iof she made any sudden twisting movements it could set her back. Don't let her climb steps (if you have steps at the doorways fix up a sloping ramp for her if you can) Don't let her attempt to jump up onto anything, such as in and out of a car, climb stairs in the house, or jump up onto sofas etc.
It's going to be hard if she is a dog that is used to outside exercise and games. She might get somewhat depressed if there is no stimulus for her, if she has to spend long periods on her bed. So make sure she gets any mental stimulus (which doesn't involve too much movement) that you can think of. (My dog, for instance will respond when she watches animals, especially dogs and cats on television! She likes me to talk to her....sing her a song....etc!)