Money 97 files cannot be opened in Money Sunset. The older file used a different database which Money Sunset cannot use. You'll have to get a copy of Money 2004 and convert to that format first, then that file can be opened in Money Sunset.
Whenever you see a password error message trying to open an older file, it means that Money tried to read the database, but there was some problem and the password could not decrypt the file correctly. Usually, it is either due to an older database, or due to the file being created in a different country's version. It gives that error message instead of the correct problem.