Home Sharing with Apple TV Gen 2

I have an Apple TV Gen 2 (Apple TV Model MC572LL/A). I am trying to turn on Home Sharing to access videos in my MacBook Air iTunes Library.

I have successfully set up Home Sharing on this Mac with my newer (4k) Apple TV. But the Apple TV 2 refuses to recognize my sign-on. (It also won't let me log in to my iCloud account or to the iTunes store.)

I have done a Reset on the Apple TV, so that now the only things it has is Settings and Computers on its main menu. Is there anything else I can try? (Yes, I have confirmed that everything is on the same WiFi.)

In the "About" menu on the ATV2 (which I called up to get the model info), I see the last line reads "Activation failed" ... is that a clue??