A: 

This problem is tangled up with getting PHP to use the correct C client library for MySQL. It is possible but it takes you into the realms of libmysqlclient*.so and your package manager. The only advice I can give is that you will probably want a version newer than (I think) 12. You may need to recompile PHP for it to link against the newer library.

For the test DB, there is nothing stopping you changing the password. I wouldn't want the test app talking to the live DB, though (I'd use a CLI client to rummage in the live DB, not the test app). However the old password format will work seamlessly with the newer client, so that may be a solution for the moment.

staticsan