Do you really need to add the credentials here? Try without them so
smptmail will try to use auth-source to retrieve the credentials.
These are my smtpmail settings:
(use-package smtpmail
:config
(setq smtpmail-default-smtp-server "smtp.server.de"
smtpmail-smtp-server "smtp.server.de"
smtpmail-smtp-service "465"
smtpmail-stream-type 'ssl
smtpmail-servers-requiring-authorization ".*"))
For me these work like this, smtpmail will try to retrieve the
localdomain and sendto-domain by itself.
If you add either to the hosts file they should be fine.
Br,
Björn