Hi @Cranbourne76,
I know that’s frustrating — especially when the error appears before you can even enter your details. And @AlWeir is correct: Microsoft has raised its security requirements, and the iPhone 5 on iOS 10.3 can’t meet the newer Outlook.com login standards.
Because of that, Outlook.com accounts can no longer be added through the Mail app on this device. The only workable option now is to sign in through the Outlook.com website in Safari, since modern authentication is required for the app-based setup.
I hope this helps clarify what’s going on. Let us know if you need any other options.