Nah. It just means that, because it’s possible your permalink setup could have collisions with a subfolder setup, you shouldn’t start with it if you have an old blog. Not that you can’t, and if you’re savvy, it’s perfectly safe to switch around. But for many novice users, it’s safer.
Well, I guess that rules that out.
What happens when you go to the new site? Does it show up?
No. What I do get is a message that says “Error establishing a database connection”.
If not, then … triple check that DB user. The most likely reason is it doesn’t have create perms.
Checked again, and tried creating another user. Users can create tables with mysql client. Also, we were able to create blogs a few weeks ago. Nothing has changed since then (that I know of).