I have the same problem you have.
The problem seems to ly in the fact its not loading the hostname from the config.
as for my my config format is
<advancedsettings>
<videodatabase>
<type>mysql</type>
<host>10.0.1.1</host>
<port>3306</port>
<user>root</user>
<pass>removed</pass>
<name>Kodi_video</name>
</videodatabase>
<musicdatabase>
<type>mysql</type>
<host>10.0.1.1</host>
<port>3306</port>
<user>root</user>
<pass>removed</pass>
<name>Kodi_music</name>
</musicdatabase>
<videolibrary>
<importwatchedstate>true</importwatchedstate>
<importresumepoint>true</importresumepoint>
</videolibrary>
</advancedsettings>
where the error my RPI gives is
11:37:40 18.293171 T:1961963520 ERROR: Unable to open database: Kodi_music60 [1045](Access denied for user 'root'@'10.0.1.5' (using password: YES))
same goes for video