I used iExplorer to pull the downloads.28.sqlitedb file off my iPhone and actually looked at it since it's just a SQL file. It appears to actually be a database of all the downloaded app (including transaction ids and other data) along with pointers to the folders in the download directory. Those folders contain artwork and other info.
I looked at the title that periodically pops up as failing to download and don't see anything different about that entry compared to others which likely means the problem is either in one of the download folders or possibly with a transaction id not matching one in the App Store server. The later would make sense since phone would try to download the app and the store would deny the request.
I'm not sure simply wiping the downloads.28.sqlitedb file is particularly wise though since it contains a history of transactions, not just for apps, but for purchased music, books and other stuff. It also continues info on pre-orders and the like. It might simply be cache data, but it's more than just apps. My guess is that it is used for pushed iCloud downloads as well so the device knows if it downloaded an app, book, etc or not.
Basically removing it without removing all the media on your device probably will have unintended consequences.
If you do wipe out that file, all the other files in the download directory basically become lost as the sqldb file is a map to all the assets in the folders. As such you'll end up with garbage data so you probably should wipe out everything in the Download folder if you are going to go this route.