Let's try and answer your queries one by one:
1. "error establishing a database connection"- Open the wp-config.php file in the root of WordPress installation and check that the DB_NAME', DB_USER, DB_PASSWORD, DB_HOST details are as per tyhe database you created. But I think the error is because you specified your DB_HOST as "localhost" whereas your host requires you to enter a specific IP address. In your webserver config, go to the page where the various databases are listed and look under a column called "Database Host" and enter the value given there in place of localhost. Normally, only 1% of webhosts (including the one I use) prevent use of localhost, but then again, it isn't something one can assume. If you can't locate the proper host name, contact the webserver support team.
2. If you are able to resolve this, your second problem should get resolved on its own.
Do post back how it went?