Problem with Mail "Invalid Incoming Mail Server"

I changed my iCloud password today and then tried to update password settings on my MacBook Air in System Preferences and Mail. I first started in System Preferences/iCloud. I signed out and then signed back in with new password. Everything updated except Mail, which prompted me to update settings in the Mail application. When I launched Mail, my iCloud account was missing, so I created a new iCloud account in Preferences. This is where the trouble began. I was able to successfully create the account, but when I tried to make any changes to the default setting (i.e. changing Junk mail filtering in Mailbox Behaviors), I was prompted to save my changes (as normal), BUT then I received this error message:

Invalid Incoming Mail Server.

The "Incoming Mail Server" field cannot be empty.

[OK]

The only option was to click OK and then lose the changes. I tried deleting the account and starting over. I tried restarting the laptop. I tried signing back out of iCloud in System Preferences. Nothing has worked. I'd like to make changes to the account settings and not get stuck with the default settings. Incidentally, when I looked up this issue in previous discussions, I tried the other recommendations that seemed to work for everyone else, but hasn't worked for me.

FYI, I'm running the most recent version of Mountain Lion.

If anyone has any other suggestions, I'd love some help with this.

Thanks!

P.S. Why does Apple make everything so hard when you need to change a password? This has cost me hours of time, not to mention my sanity.

P.P.S. I've had no issues in updating my iPhone and iPad.