Passenger hosted Rails app *painfully* slow, but the server is a beast
Maybe your sql pool size is too small? This essentially limits the parallelism of database workloads in your application which in turn builds up to much increased load as soon as you put work on your app stack...
As a first step I would deploy a minimal "Hello World" type Rails application to your environment and see what throughput you get with that. Doing that will at least tell you if your problem is with the environment or somewhere in your application.