Why is he seeking penance? Main reason that jumps to mind is that he essentially betrayed the Jaghut by abandoning them to take the Throne of Death instead of the Throne of Ice (while arguably still occupying that seat) in their war against Death. Sure, he ended the war but...it's tantamount to taking over Nazi Germany in place of Hitler to end the war with Germany, I guess.
Then there's the fact that he may have been an instigator of that war, which would have led to much death amongst the Jaghut, which in turn made them more vulnerable to the Imass.
And I suppose you could take into account the mass destruction of dead people at the end of TtH, and his general treatment of the dead throughout his reign, though those are less Jaghut-specific.
So there are a few reasons he would seek penance, though which ones specifically we're not certain of (he was definitely tired of being the Lord of Death, though), and I might have forgotten a couple of others.
As for Hood being the soletaken dragon...it wouldn't surprise me, but most soletaken have some form of giveaway which we haven't seen in Hood. I can't see him being quite so tired of things and regretful if he has Eleint in him, either. Though the lack of a name in that reference...it could mean it's someone we don't/won't meet and Erikson is sparing us some pain (yeah right...) or it could be someone we've met but Ruin doesn't want to give up the ghost (so to speak) or doesn't think he's still alive (and Hood wasn't) so doesn't think a name is necessary. But we'll just have to wait and see for that one.