can I change the wifi hotspot encryption to "WPA" or "WPA-PSK"???....mobile device that depends on wifi hotspot does not honor "WPA2" encryption.

If your Wi-Fi hotspot is being provided by an Apple router, then you would use the AirPort Utility to change the wireless encryption type, as follows:

• Open the AirPort Utility.
• Select the base station, and then, select Edit.
• Select Network.
• Select Security.
• Change the security type to: WPA/WPA2 Personal

Yes, but I wouldn't. Bad idea to sacrifice security to let an old or defective device on. if possible, connect it through ethernet, or even turn on a guest network briefly to let it on, then disable it again.