Joe: Sorry, mate.
To the OP: It is a success story, and I don't want to denigrate it. I might well have ended up with a very similar solution.
But I do want to point out that you ended up warping the structure of the entire class to deal with this one person. You were able to do it in a way that still provided value to the class (yay you), but that's what you did.
Is that the best way to deal with such a situation? Might you need to confront such a student more directly? Would it be better for the class? Would it be better for the disruptive student in the long run?
Moot points, now, thankfully. But maybe worth planting in the back-brain and see what they generate.
I don't disagree that being more direct would be more efficient, quicker, and a lot less painful. However, as I've explained, a direct confrontation was forbidden by our head instructor. If a direct confrontation occurred I was not permitted to be the one taking the initiative; that privilege (or lack there of) belongs to the head instructor or dojo-cho alone. It was made clear to me that that was not my place, and my direction was that I was to keep control of my class.