MedialEment.js module not seeing the installed library
The easiest way to debug something like this is to look at the MediaElement module itself.

Its implement of hook_library() contains the following:

$libraries['mediaelement'] = array(
    'title' =&gt; 'Media Element',
    'website' =&gt; 'http://mediaelementjs.com/',
    'version' =&gt; '2.1.6',
    'js' =&gt; array(
      // The mediaelement script detects the path to itself to call other files
      // in the same location. With preprocessing this is problematic as the
      // script is no longer in the same directory as its other assets. There
      // is an option that can be passed into the script with its location.
      // @todo Update all calls to mediaelement to pass in the assets location.
      $path . '/build/mediaelement-and-player.min.js' =&gt; array('group' =&gt; JS_LIBRARY, 'preprocess' =&gt; FALSE),
    ),
    'css' =&gt; array(
      $path . '/build/mediaelementplayer.min.css' =&gt; array('group' =&gt; CSS_SYSTEM),
    ),
  );


So it would appear the module is looking for


sites/all/libraries/mediaelement/build/mediaelement-and-player.js
sites/all/libraries/mediaelement/build/mediaelementplayer.min.css


If you make sure those files are in the right place, you should have no more issues.