The cards fields should show up in Step 6 of checkout. Your image only shows Step 5, where customers have to make the decision of which payment method to use. Are the fields not showing up in Step 6?
If you're unable to get the free PayPal extension working, I do have a commercial one available called
PayPal Payment Gateway. Feel free to take a look at the screenshots and demo site, and if you're interested let me know at
www.getclearthinking.com/contact if you have any questions.