can you specify exactly how does the index file look ? i mean the code.
There are a lot of plugins that support editing of content remotely. but no admin changes or functionality are possible through them. you will need to log in for them everytime.
I dont see any reason not to move ahead. These errors are common when working on localhost platform.
Cant see anything beyond the required password page in the mentioned site.
You can try downloading the plugin from the net and place them in your wp-content/plugins folder. AFter that jus go to your admin panel and activate the plugin. This error usually occurs when your localhost cannot interact with the wordpress libraries.