In the current version of MySQL the "password" column was renamed "authentication_string". In the "Installing from WW2.12 Ubuntu 16.04 Vanilla LiveDVD" directions this change was made in the SELECT command
SELECT Host, User, authentication_string FROM mysql.user;
but unfortunately not in the subsequent UPDATE command. This has now been fixed. Sorry for the inconvenience and thanks for bringing this to our attention..
Arnie