|Not Maggie. Not Maggie's dog. Cool pic, though!|
Your dog might know words like ride or car. He for sure knows treat and walk. Not only does he know words, he senses how much meaning is behind them, especially no. Like a toddler, he learns to judge when you really will get out of that chair and stop him and when you're just too tired or too lazy to follow through.
Even when they don't understand words, dogs sense the emotion behind them. They know when we're sad, when we're excited, and when we need a wet nose shoved into our faces.
So why do we talk to them beyond those few hundred words they know, like ball and fetch? Because dogs are great listeners. Unlike most people, they've got nothing but time for you, and if you want to tell them stuff, they're okay with that. They won't pass it on to other dogs. They won't tell you you should have known better. They won't change the subject. Instead they'll look at you intelligently, let you talk for as long as you need to, and then suggest something that will improve your mood.
No, they can't say "Walk" or "Ride" or "Fetch," but they know those things are good for you. They'll probably act it out until you get it.