I actually did two things to resolve the issues discussed here and it was actually very simple.
First to get the ODBC to connect from the app server to the database all we did was enabled FIPS in the Local Security Policy of both servers
Second to get the BizTalk administrator to connect to the database we had to use a static port in the SQL Configuration of the database instance.
Any feedback is appreciated
Did you disable TLS 1.0/3.0 ? I think that's the tweek for when you disable those but that may not apply since MS updated TLS support for 2008R2.
I have always had to use static ports with BizTalk servers for one reason or another. Just one of the many quirks with that one.
Sue