Coupling dynamical charges to gauge fields can result in highly non-local interactions with a linear confining potential. As a consequence, individual particles bind into mesons which, in one dimension, become the new constituents of emergent Luttinger liquids (LLs). Furthermore, at commensurate fillings, different Mott-insulating states can be stabilized by including nearest-neighbour (NN) interactions among charges. However, rich phase diagrams expected in such models have not been fully explored and still lack comprehensive theoretical explanation. Here, by combining numerical and analytical tools, we study a simple one-dimensional Z2 lattice gauge theory at half-filling, where U(1) matter is coupled to gauge fields and interacts through NN repulsion. We uncover a rich phase diagram where the local NN interaction stabilizes a Mott state of individual charges (or partons) on the one hand, and an LL of confined mesons on the other. Furthermore, at the interface between these two phases, we uncover a highly frustrated regime arising due to the competition between the local NN repulsion and the non-local confining interactions, realizing a pre-formed parton plasma. Our work is motivated by the recent progress in ultracold atom experiments, where such simple model could be readily implemented. For this reason we calculate the static structure factor which we propose as a simple probe to explore the phase diagram in an experimental setup.