First, what is the size of the hosts file after Adaway had been applied? Another way to determine if the hosts file had been modified is to look at the banner at the top of the file. It will indicate it was modified by Adaway.
Did you reboot after applying the hosts file?
Specifically, what app(s) are still displaying ads?
As far DNS logging, look at the bottom of the wiki page for reasons it might not work.
But now it looks like ad blocking is working in Chrome, it was not working before, I tested for 2 days. But youtube still display ads.