Your observation is right on the mark. A crate used as her sleeping area should never be used as part of a reprimand, it is confusing for the puppy. You can try placing her in a small unfamiliar room like a closet or laundry. The most important feeling for her is your acceptance and interaction with her so the idea behind "time out" is for her to feel that this in in jeopardy. Some puppies respond to the "time out" because they are anxious about the situation, others just take it in stride and take a nap. If standard approaches to "time out" are not working you can try putting her on a short leash and fixing it to say a heavy chair leg so that she can see you or the family but not participate. Other measures are using noise like a can full of coins or some people have success with a bicycle horn or even a small air horn. Try to think of something she does not like and build it into the corrective measure. Some examples that owners have shared are the vacuum cleaner or a hair dryer.