I'm agreeing with martian on this (the devil just got a shiver), your breeder is an idiot, and that should cause a huge red flag to go up. Sounds like a money breeder and not a breed breeder.
Crate training isn't cruel, it's a safety thing as well as a territory thing. If you don't crate train, you'll reap the trouble later. Dogs (and especially puppies) will always take a mile if you give an inch. There's too much in your house for a pup to get into that can be deadly and/or dangerous for them. Keep them in the crate to keep them safe, but also to show them where their private safety place (territory) is. It speeds up the house breaking because animals don't like to shit where they sleep or eat. Especially in such small confines.
Energy.. yeah.. you need to devote at least (very least) one hour of exercise EVERY day for your pup. Boredom and high energy will NEVER mix. Kongs and Nylabones will help with the chewing, but the more exercise the dog gets, the happier the dog will be and the fewer problems (probably) you'll have.
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