Re: Discourged. Want to give up!
I would keep him in disposables until he is all cleared up so when you go back to the cloth you are starting with a clean slate. In the meantime, I would wash the freetimes in a mainstream detergent (like Tide) with a little bleach. Maybe even do a few extra rinses to make sure they are good and clean.
Once his bum is all cleared up try the freetimes again... if they still bother him then it's probably time to try something else... and you might want to stay away from suede cloth and microfiber because those are the likely culprits...
Flats and flips are a nice trim/easy clean option, and since you already have the flips it would be an inexpensive overhaul. You can easily add a fleece liner (buy a yard of microfleece from Joannes and cut it up) if you want baby to feel dry.