So I have found a temporary solution, but the concern remains.
The registration setting on my main portal was set to "None" (intentionally so). I changed it to "Private". After this I am able to install the Account Login module to a page and the default login link (mywebsite/login.aspx) is also working fine.
However, I still wish to find to solution to my original problem because I want only the admin should be able to add the users. There should be no registration option open (which is open now through default register URL).
My biggest concern is default login URL (mywebsite/login.aspx) not working when registration was set to "None". Its scary for any admin!
Any help would be appreciated!