Here's the key: If you want to do this, you DON'T make a new website or virtual directory. You just put the aspx files and the bin folder in the ISV folder of the root of the CRM website.
I figured this out by finding an amazing web page from Microsoft that answered all my questions. Here it is:
Important things to note:
- You can put dll's in the bin folder in the application's folder in the ISV folder of the root of the website if you have installed Rollup Update 2
- You must do all of your configuration in other ways from the web.config
- If you are using a web application project, you must explicitly reference the dll in the @Assembly page directive in your aspx pages.
I hope this saves you some pain and time.