Based on this post on WinSupersite and the comments to this question, it looks like you need to generate an App Password for Outlook 2013, since you have two-factor auth enabled.
You can generate an app password at the Microsoft account management web site, again from the Security info view. Just tap the link Create a new app password under App Passwords. When you do, you’ll be provided with an app password that you can type (or copy and paste) into the application.
This step is only necessary because Outlook 2013 does not natively support the two-factor authentication mechanism where it would ask you first for your password and then for your One-Time Password (OTP) generated by your second factor. The next release of Outlook might, but who knows; Microsoft hasn't announced the feature set yet.
The app password is an un-changing password that basically bypasses the two-factor authentication system, without making you use your actual password. An app password can still be used as a substitute for your two-factor login (effectively making your login one-factor for the purposes of this password), so be careful that you do not leak your app password to any public location.