I agree with others that he needs discipline but please get some good books on discipline -- it is not automatically the same thing as punishment. Discipline teaches, punishment (like swats and taps and spanking) does not teach. Time outs may be effective because he is at a good age for those; however, you and your husband MUST be very consistent and put him back in time out over and over and over if he gets up and tries to fight it. Please get books by Jo Frost (she was "supernanny" on TV a few years back) because she has very good techniques for time outs -- but be very aware that at first he is going to get up, to argue, to move away from the time out spot and it is vital to return him there without yelling, fussing or otherwise giving additional negative attention to him. You may have to spend a very long time on each time out at the start (see if you can find some examples of this re: the Supernanny TV show online) but it will pay off -- only IF you stick to it like glue, stay calm and do not cave to him. And your husband must be 100 percent on board so you and he have exactly the same discipline every single time for every issue -- or your son will quickly learn that he can "play" daddy to let him out of time out before it's over and before he's apologized.
Also get some good resources on child development, because you mention that he is "smart" because he knows colors etc. but you then seem puzzled that "he doesn't seem to understand things completely." You seem to confuse smarts about things like colors or numbers with a child's ability to understand how to control his temper. Read up on how he needs to learn to use words, not angry actions, to tell you what he feels.
He needs to be the one who cleans up any messes he makes, including pee on the floor, but you need to enforce that calmly.
Also, he's practically screaming for attention. Children will gladly pursue your "negative attention" if that's what they can get from you -- if you yell and are angry with him, that is still a form of attention, and he will do "bad" things just to get that attention. It's true but many adults don't see that their negative attention can be craved by kids just like positive attention can be.
Be sure to give him positive attention as much as you can (while still being firm and very swift with discipline when that's required). Praise when he does anything right (or even just halfway right) -- "Hey, good job putting the toy into the toy box" or anything at all. Be sure he gets to do some outings all on his own with your or dad without his older brother along and that he has some activities of his own and isn't just taken along to his brother's activities.
This phase can pass but you need to choose a consistent discipline and stick with it for the long run (if you feel like "we've tried everything!" that indicates that you have shifted from discipline to discipline too much). And he needs to be given a lot of positive attention when he is doing OK, and needs time with you that is his and his alone. Again, check out Jo Frost's books with an emphasis on using time out effectively.