Is it possible to have passwords configured per database or per host in .my.cnf

As I answered here, you can add a section for each user/host/db you connect to using the syntax in your ~/.my.cnf:

[clienthost1]   # Note: client + host1
user=myuser
password=mypass
database=dbname
host=server.location.com

Once this is in your user's .my.cnf, you can utilize it by doing this on a command line:

$ mysql --defaults-group-suffix=host1

Put clear passwords in text files is not recommended since mysql 5.6.6.

You can use mysql_config_editor to save passwords encrypted also to provide different passwords for different connections https://dev.mysql.com/doc/refman/5.6/en/mysql-config-editor.html

The other answer is correct. Unfortunately mysqladmin doesn't support --defaults-group-suffix (at least not the version I'm using).

Hence I resorted to using --defaults-file=HOST.cnf instead, which works for mysql, mysqladmin and mysqldump.