That is interesting. The good news is that you can limit your scope of thought on this to a fairly small set of items. There's only so much that can go wrong here. Try this:
ssh -vvv root@IP
See if you get anything in the output that tries to explain the failures. Maybe it couldn't load id_rsa, for example, and advises on permission changes. Seems unlikely to have permission issues though if you used ssh-keygen. So glance at that but if you see nothing, let's move on.
Double check that the items in /root/.ssh/authorized_keys are valid. One key per line, no line breaks, no weird spaces. Your key should look something like mine:
ssh-rsa AAAAB3NzaC1yc2EAAAADAQABAAABAQDLmqjzH1lJ+uTlL2yGjyOcFKdxYFWYLSUdqN5LMRA1YiXHJvTkOo4Ky8w8NmNqJoKwLhxESLNpdUteZbacCRf3I9j57td8IaySk3LFpNK1waDwPcwFlvOv6NtKdwFsgQ0CUqJ6Ya9AUVfTlyePBhH9lKy7gnsloAtHOfGlHdCt5X5f2iB0WU/PPZZskfj79z84dlUPrdfdq8DZmOQDnTEF6XnqaYIqrYXKnPOTovCnOGrc1xJjV+UQ7dZhc/5UCECDK8DEUKZ21aK5htCwhqQFLVV4M6SB7/mDiWXvNx79hKuHDHsHCv6L4YuqHkHAGNtmHq2UxntJ9K6i0DxoMq/1 jarlanddonnell@Jarlands-iMac.local
Also unlikely that key login is disabled on the droplet, so I'm kind of thinking you may find something there in authorized_keys.