My question is, how should I present this experience in a positive light so it does not work against me?
Experience you gained while trying to start your own company is extremely valuable in many cases. The technology, processes and perhaps business skills you honed may very well be an asset to your new company. Concentrate on these - just as you would if you had been employed by a company at the time and had worked on projects that didn't happen to get launched.
it is important to present this experience like I'm no longer tied to it full time and I'm ready to commit to a new job, even though I will continue to develop it, on the side on my free time.
I suspect this is your biggest problem. You have to ask your self if you really are committed to a new job, or if you are just committed until your free time gig takes off. Interviewers will ask this, because they usually want to hire employees for the long haul who are dedicated to their new company. Come up with a great answer and practice saying it until it feels natural.
On the other hand if in your heart you really aren't committed to a new job, you may be better off working as a contractor. That way, your commitment is expected only for the duration of the contract, and you can re-assess your situation in between contracts.
Also, the planning and work that went in to creating this SaaS from scratch, took upwards of two years and low pay. What do I say if I'm asked about how much I was paid there (which was zero most of the time)?
If asked, you should be honest and explain to the interviewer that you drew no pay most of the time. This is perfectly reasonable. Explaining how you were trying to launch a product and company will help the interviewer understand.
Also, what if I am asked for references about this position?
Do you have any references? Perhaps a financial backer, partner, or someone you hired? Perhaps a client with whom you were working?
If you have references for that period of time, provide them if required. Otherwise, use references prior to that period.
Lastly, would a viable option be representing myself as a partner of the company that made $X/hr even though this isn't necessarily true?
Viable? I don't believe lies are usually viable alternatives, but that is something your personal ethics will dictate.
I can say that I never hire people who lie to me (assuming I find out before an offer is made). And finding out that an employee lied during an interview is grounds for firing in every company where I have ever worked.
Good luck!