Another user found a solution and it worked for me too. Our mistake was assuming that we could open a password-protected Word document in Dropbox. Evidentally we can't, and it would be good if Dropbox just told us that instead of the vague messages about needing to use a supported version of Word and a supported browser.
So instead of trying to open the password-protected Word document in "Word Online", then trying desktop Word, as directed by Dropbox's error popup boxess, download the file instead. Click on the ..., then download it to the local hard drive. Then you will be prompted to enter the password, etc., as usual.
How do you get refocussed while working from home? Do you find any of these options keep you from getting distracted?