(Using password: YES) implies that you're trying to connect to your MySQL server with a password or an incorrect password. Seeing as everything is correct or so you say, the latter is removed, leaving only that you're connecting to your MySQL server with a password when there is none. During the initial set up of the MySQL server, you were given the option of modifying the security settings, if you didn't, your MySQL server has no password and thus, if you try to connect to it using a password, it will give you an error.
In short, you're trying to connect to a MySQL server that has no password, with a password.