You do not have to delete / add back the account in AquaMail just to change the password.
Run the app.
You'll see a (similar) error message, in red, below the account, on the app's main screen (account list) -- it will take you to Account Setup screen for that account.
Enter your new password and press Next to validate and save.
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Or as @mikeone wrote, another way to get to "account setup" is to long press the account (same place, app's main screen, account list) -- then choose Account setup from the popup.