Point 1. NMDS_E is not a 'client' DSN it is a direct mode DSN the same as NMDS_D and so the line at the start of the sys.odbc.ini fiel shoudl really say:
NMDS_E=TimesTen 11.2.1 Driver
This issue is not relevant to your current question but could cause you problems in the future if you do not correct it.
The issue here is that you are providing far too much infomation in the JDBC URL. You are basiccally bypassign what is configured in the sys.odbc.ini file. A 'normal' JDBC connection URL looks like this:
If you try that then it should pick up the UID and PWD from the file. Of course this is terribly insecure and you should never hard code UID or PWD in a file! You should really provide them as part of the JDBC connection call.