I'm using the same driver version - so in general it should work....
What message appears when you use a hostname that does not exist in your network and then click on Test Connection?
Does the SQL Server really listen on port 1433?
Might there be a Firewall blocking the requests?
I checked the hostname that does'not exist ,displayed below message: Status: Failure - Test failed: Unknown server host name 'localhost2'.
How to check Server really listen on port 1433?
How to check Firewall blocking the requests?
When you're a newbie, let's test the ODBC connection first. On the machine where you've installed SQL Developer, open the ODBC Administrator and check if you have a SQL Server ODBC driver installed. If yes, configure a new DSN and at the end test the connection. Is the connection successful?
Now open again SQL Developer and compare the settings you have configured in the ODBC Admin with your settings in SQL Developer. Does the SQL Server hostname, port# and database name match? Then test the connection in SQL Developer as well.