Linux – Unmounting root filesystem without rebooting the server

There is nothing wrong whatever the fstab or the mtab contains.

So /dev/simfs and different variations means nothing wrong. If the host itself has filesystem or I/O problems the guest (your vps) will suffer, but this is not related to what you see in the mount command output.

If you have a key that's simply hard-coded and always available to the system, then you're essentially defeating the entire point of having the disk encrypted in the first place. If you're set on that approach, create a LUKS key file and attach it into the crypttab for that device. See here for instructions.

A better option might be to have a TPM chip handle the key; it can provide secure storage for the encryption key and automatically provide it when needed. See this question for more info.