simplythi - I don't think you should only confine him until pee time because he should be out and play like normal. Instead, when you do take him out of the crate, make that the time when he learns about peeing. What I mean is make sure that when you take him out the crate, you take him immediately to his pee area. And wait until he pees. Praise him lots! Hopefully he'll associate that with what he's supposed to do. If you aren't able to be around him, then I would say put him in the crate. I know it's hard in the beginning and you think that he will never learn, but just hang in there!
Victri - Hercules used to do the same thing with the pee pad. It was so frustrating. It made me decide that I was going to train him to go outside instead. But the problem with that for me is that we live on the 3rd floor of an apartment, so that was too much running up and down. What we did was build a little box and put it on our balcony. We were going to put sod in it, but it was out of season, so we put the pee pad in it. And when the pee pad was in the box, he wouldn't mess with it as much. So the point of my long story
is that maybe you cojld find a box or something like that to put the pee pad in.