I've done dozens of one-click installs of WP on DreamHost... far easier than manually... you're working too hard at it.
(1) Be sure your website is live, that the domain has made its way around the internet. You should be able to go to the website (or directory where you want to install WP) and see an
Index of listing, with no files.
(2) When you use the one click install at DreamHost, they create the mysql database, install the software, and configure the wp-config.php file. So you don't have to change the dbname, hostname, etc., at all. They do it. Just wait 10 minutes and point your browser at your website, it's ready for WP to create the tables, ask your email address, and give you a password to get you going.
Note, to start, point at the root directory (where you installed WP), not the wp-admin directory. Not install.php. Just go to the installation directory or domain root, i.e.,
krazitrain.com/ ... and let WP do its thing.
(3) Sometimes at DreamHost, their control panel gets slow. Or it has trouble connecting with the mysql server to set up your table. If that happens, anxiety will be of little use. (I've tried that.) Just wait a couple of hours and try again. It will probably fly.
localhost is probably not your hostname. In fact, with the DreamHost system, it's probably more like
krazihost.krazitrain.com depending on what you selected at the one-click install panel, and after automatic reformatting for DreamHost. The beauty is that they set it up for you, so when you do the one-click install and really let them do it, it just works! We could debate forever whether DreamHost 'ought' to do it that way, but they did, and it works for them, and once you get it, it's dynamite.
(5) It's probably a good idea, after doing the one-click install, to ftp the wp-config.php file (with your configuration data) down to your local workstation as a backup and reference, just in case.
I've done one-click installs that were running as quickly as two minutes later (proving I get anxious at times). Usually it takes a bit longer. Ten minutes will almost always be long enough. So, go get a cup of coffee. Decaf, if you're anxious.