I don't have time now to fire up my before mentioned left-over ubuntu 20.10 VM, which anyway uses newer version of deluge package besides not being your ubuntu edition anyway, but I did some quick testing on my own used distro, and have a few comments.
When selecting yes to change password, then deluge opens preferences and you're not logged in yet, as connection manager is behind that dialog, hence empty - should be filled a bug ticket about this. After logging in and checking preferences again, then worked/filled-in.
It asks for if wanting change password, as long as '"first_login": false,' isn't defined in web.conf. Note all changes, should be made into /var/lib/deluged/.config/deluge, and not in ~/.confg/deluge. I didn't have issues and was set auto, though my distro makes an exception and uses unstable deluge in there repo, as makes sence here, but doubt it's different in latest stable deluge, atleast don't remember any commits added referencing said issue in commit-log of develop branch.
I checked adding to default daemon worked fine for me, i.e. with deluged and deluge-web stopped, edit web.conf to have the first line of the localclient user added into default-daemon and start deluged and deluge-web afterwards.
When something downloads and quickly stops afterwards, then often a permission issue i.e. I could download in the default location fine, but when changing to my own user-folder's Downloads folder, then failed, because the user-account deluged is running under, haven't write access to that folder, so need change permissions for that to work, e.g. add debian-deluged group to your own user and change your download folder to permit fellow group-members write-access, if not already(btw I made an edit at bottom of my last post, about if wanted then you could revert to standard deluge user if wanted, as believe it works now, but up to you, and won't help any of your issues however, and just added for full reference if preffering instead). However, in that case the download shows error in the webui and you didn't mention that, plus you stated that error of the tracker, which when looking up means the tracker's url couldn't be resolved, so network issue seemingly.
I once had a stupid issue that took long to solve for me, which was that my /etc/resolv.conf wasen't readable by the user of the deluged running process and hence no network access, but that's a special case and not likely related, as was my own fault for restoring that file from a backup, which messed up the permissions.
Can you check that you have internet access with your deluged user, by running in a terminal: 'sudo -u debain-deluged curl ifconfig.co', if works should output your IP address and if no internet or nameserver issue(dns) then would show an error instead.
Edit: Forgot the findcaller error, that is needing updated twisted over 19.7.0, but it already has that I remember from last testing it on ubuntu 20.04, but then still needs a fix that would needing backported from develop branch:
https://git.deluge-torrent.org/deluge/c ... ed0f2c3206 Should be reported to package maintainers, though already has for ubuntu(or debian, cannot remember) I believe one posted once he just did, so maybe is in the 2.0.3-3 version of ubuntu 20.10, but I haven't checked that myself yet.