There is no way I can keep up with your posts, as you continue to post replies to yourself before anyone can answer your posts .
While I am willing to help, you need to help yourself to some degree. The questions you are asking lead me to believe that you need to take a deep breath, and spend a few hours with a good "Beginning PHP" and "Using MySQL with PHP" book or tutorial. Once you have done that, learning to "include" your config file, and set up a connection to your database will probably be trivial for you. Fortunately, there are very good tutorials on the web that are free. Just Google for "beginning PHP", etc. and you will find lot's of information.
I happen to like phpbuilder,net and codewalkers.com for tutorials, and while there is some "advanced" stuff there, there is a lot for beginners.
I'm sorry I can't "interactively" teach you PHP on the forum (there just is not time), but I remain happy to answer a question if you run into a specific problem, or point you to a resource that might help - I just can't go through your code, line by line, to help you "write" your application.
Your first problem is to succesfully include your config file contents in your login.php file. You can accomplish that using the include() or the require() fuctions. W3 Schools has an excellent beginning tutorial on include() require() fuctions, with many examples.
If you thoroughly review that tutorial, you should understand how to do this; it explains it far better than I could in this post.
After you get that resolved, you need to use the control panel at Dreamhost to create a MySQL database. In doing that you will create a "host", a "database", a "user", and a "password". Using these, with a tutorial on how to connect to a MySQL database using PHP, will be your next step.
Don't be discouraged, and don't get impatient. Sometimes it can be hard to learn something, there really isn't a way to do this kind of stuff on the web without that investment of time. Good Luck!