Well you could just replace the old files with the new ones, and avoid all this staging process.
But if you do that and your store is broken because you didn't test anything, then you're left with downtime.
All of this staging process is JUST so you can make sure nothing breaks before going live. There's a lot more to ecommerce than there is to a simple blog that takes input text and displays it back to you.
In the end, an upgrade is really just that: replacing the files and running the short database-upgrade step. Everything else is just safeties for you.
That's what this blog post is about: http://www.zen-cart.com/entry.php?3-How-do-I-rebuild-my-site-on-the-new-version-instead-of-upgrading ... and walks you through the various angles of the process.
Your "admin password" problem looks like it was confusion or uncertainty about 'what' password to use. It's looking for your store's admin password, the one you use to login to your admin. And because you'd restored data from your live store into your testing area for upgrading, it's that live store's password you needed ... because restoring wiped out the temporary one you'd made when you did the new install of the new version in the testing area. This is entirely expected.
Your other problems have been around not understanding how to use your hosting company's control panel tools to set up databases and users, and restoring databases and so on. Those really aren't things related to Zen Cart itself.
As to updating configure.php files, there isn't any need to touch those after installation, since installation normally generates those for you. Granted, you said your installation left those files blank. That's a result of your webserver not allowing PHP to update those files. Usually that's because there's a permissions problem preventing those files from being written to. Zen Cart goes to many lengths to insulate you from such a situation, but it can't magically guess every problem that could be caused by every webserver's possible configuration settings.
We're sorry that you've encountered frustrations with all these things related to running a website, and some that relate to quirks which Zen Cart has encountered with your server. Yes, v2 will be much simpler to upgrade, and will put the onus of all problems back on your own customizations and plugins, and not on the installation process or the act of replacing core files. You will still (as with anything) need to still apply upgrades to anything you added/changed outside the core files. If you know some way of guessing at and fixing all those things accurately, please get in touch with our development team to share that information.
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