MongoDB replica set configuration error

I am trying to set up a MongoDB replica set on Digital Ocean.

I edited /etc/mongo.conf and specified replica set id:

replSet=rs1

and did not change anything else.

I did rs.initiate() on the first instance. Here is my config:

{
"_id" : "rs1",
"version" : 2,
"members" : [
    {
        "_id" : 1,
        "host" : "localhost:27017",
        "arbiterOnly" : false,
        "buildIndexes" : true,
        "hidden" : false,
        "priority" : 1,
        "tags" : {

        },
        "slaveDelay" : 0,
        "votes" : 1
    }
],
"settings" : {
    "chainingAllowed" : true,
    "heartbeatTimeoutSecs" : 10,
    "getLastErrorModes" : {

    },
    "getLastErrorDefaults" : {
        "w" : 1,
        "wtimeout" : 0
    }
}

}

Now, I want to add two more instances, but I see the error:

{
"ok" : 0,
"errmsg" : "Either all host names in a replica set configuration must be localhost references, or none must be; found 1 out of 2",
"code" : 103

}

How can I change the host to the server's ip address? If I try reconfig I get:

{
"ok" : 0,
"errmsg" : "No host described in new configuration 3 for replica set rs1 maps to this node",
"code" : 103

}

/etc/hostname contents:

mongodb-1

/etc/hosts contents:

# Your system has configured 'manage_etc_hosts' as True.
# As a result, if you wish for changes to this file to persist
# then you will need to either
# a.) make changes to the master file in /etc/cloud/templates/hosts.tmpl
# b.) change or remove the value of 'manage_etc_hosts' in
#     /etc/cloud/cloud.cfg or cloud-config from user-data
127.0.1.1 mongodb-1 mongodb-1
127.0.0.1 localhost

# The following lines are desirable for IPv6 capable hosts
::1 ip6-localhost ip6-loopback
fe00::0 ip6-localnet
ff00::0 ip6-mcastprefix
ff02::1 ip6-allnodes
ff02::2 ip6-allrouters
ff02::3 ip6-allhosts