blog_development doesn't exist
You can see this in sql by the 0 rows affected message
create it in mysql with
mysql> create database blog_development
However as you are using rails you should get used to using
$ rake db:create
to do the same task. It will use your database.yml file settings, which should include something like:
development:
adapter: mysql2
database: blog_development
pool: 5
Also become familiar with:
$ rake db:migrate # Run the database migration
$ rake db:seed # Run thew seeds file create statements
$ rake db:drop # Drop the database