Advice on new puppy behavior

Hello! I am coming on here because honestly I cant deal with my new puppy anymore.

For context. I have a 2 year old pomapoo-schnauzer. He is an angel. Never had any issues training him or anything. He does agility and Fast- Cat racing.

Recently, we added a new addition. A Jack-Rat terrier. We got him at 8 weeks and he immediately needed to go into surgery for a hernia. He spent the first few weeks of his life in a cage/crated area since he is a jumper and vet recommended it for healing.

During this time we did all we could to do trainer recommended meetings between the dogs which always ended in puppy freaking out, growling and getting aggressive.

After he was done healing we put him into puppy training and consulted a private trainer for helping the two dogs get along. The puppy was almost immediately removed from puppy class as his aggression was too bad. The private trainer said we should try anxiety meds since it seemed like his issues were rooted from anxiety. The aggression had pivoted not only towards my other dog but me and my S.O as well.

He is 5 months old now and we are still trying anxiety meds actively. He has gotten less aggressive towards us but still has aggression with other dogs.

Unfortunately, at this point he pretty much lives in a crate or a play area we made for him and cannot really have freedom or else he starts attacking. He was fine in his mini crate but we recently switched him to a larger cage and he escaped it today by biting at the metal bars until he got out.

Tons of people at this point told us these are issues I will forever deal with and should consider giving him to another family / figuring out a different route but i truly cannot bring myself to do that as I have developed love for the little guy and sympathize with his struggles.

I just cannot keep him contained for the rest of his life. My older dog goes to events, comes out with us and enjoys being around people. I cannot just leave the puppy home alone all the time.

What should I do?