The usermod above was to add www-data to pihole group, not the other way round 
. The related permissions are hence to check in: ls -al /etc/pihole
Btw in your debug token I see:
[✗] May 11 13:17:36 dnsmasq[862]: bad address at /etc/hosts line 8 (https://discourse.pi-hole.net/t/why-do-i-see-bad-address-at-in-pihole-log/3972)
Did you check: Why do I see "bad address at" in pihole.log?
cat /etc/hosts # Mask any private IPs/hostnames before pasting here!