Seems like every other day XrmToolBox's Plugin Registration tool fails to connect. It's probably the most fickle tool I've ever used professionally (is this really the best tool for the job? yikes)
In years of working with it, I've not yet found a reliable way to get the tool to connect. Everything connects fine in the browser. But XrmToolBox randomly fails.
And I've never found or read online a reliable way to figure it out except restart your computer, throw salt over your shoulder, spin counter-clockwise once in your chair, try again later.
Anyone have a better way?
The server was unable to process the request due to an internal error. For more information about the error, either turn on IncludeExceptionDetailInFaults (either from ServiceBehaviorAttribute or from the configuration behavior) on the server in order to send the exception information back to the client, or turn on tracing as per the Microsoft .NET Framework SDK documentation and inspect the server trace logs.
That was the only error I got from XrmToolBox. But it led me to solving the problem. Followed this article to enable more detailed error log:
Tried again, and saw that indeed there was a meaningful error in the XrmToolBox logs.
TL;DR: Turn on better error logging in the on-premise CRM web.config! Then try again to get a more helpful error.