Yup. When done as-correctly-as-possible those passwords should be encrypted on a per-user basis and keys should not be stored in the same datastore as the ciphe

Yup. When done as-correctly-as-possible those passwords should be encrypted on a per-user basis and keys should not be stored in the same datastore as the ciphertext. That's what we ultimately did for a project circa 2013; I assume that most folks do similarly.