The error message is complaining that /home/*user/etc/*site/passwd passwd does not exist, however I can see that it is there with a creation date of 12/14.
I would try to reset the password for that email address from within the cpanel. If the issue persists, you may want to delete and recreate the email address, again from within the cpanel. You stated you are not able to create a new email account. Is that from within the cpanel? If so, what types of errors are you getting when trying to do so?
I created a test account from within the cpanel using the same method you would use and was able to log in without issue. I checked the /home/*user/etc/*site/passwd folder and the test account and your account has the same information in the file.
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