I am trying to install DNN using Web Platform Installer. It tries to connect to .\SQLEXPRESS, which I have installed along with SQL Server, and wants me password for sa. When I provide it
with a password, it says "password invalid or cannot connect to database".
I thought to myself there might be a problem with the sa account. I opened SSMS 2012. There is a red arrow downward sign on the sa account. Whenever I am trying to change login status to Granted it opens up an error message:
error 15151
Cannot alter the login 'sa' because it does not exist or you don't have permission.
Nonetheless I tried it with administrator account and also by disabling UAC. None worked. Screen shot follows:

Details:
SQLEXPRESSversion: 10.0.2531- SQL Server version: 11.0.2100
Update: Following some guidelines I tried to change authentication in SQL Server Management Studio from Windows Authentication to Mixed Authentication, but it failed with the following permission error:
