The credentials you have given to Jira for the database connection are wrong.
It's complaining about character sets, which suggests the password might contain a character which is being interpreted incorrectly, so you should check the database collation and character set are correct and that the password uses characters in that character set.
I'm afraid it absolutely is the reason. I've not commented on what is working or what is not, because the answer is the same.
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You have configured something in Jira that makes a database connection. The credentials for the database are wrong, or the database is incorrectly configured. You will need to go through your add-ons to try to work out where you have done this.
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