I suppose you are new to scripting?
First of all $1 is the full path of the folder, so /aaaa/bbb/ccc/name.
Next, you need to add quotes. The date command doen't work like you're using it.
What you're probably after is something like this:
#!/bin/sh
# go to folder
cd "$1"
# go one down
cd ..
# Create date stamp, careful: there are single quotes and back-ticks!
MYDATE=`date '+%Y-%m-%d %H:%M:%S'`
# rename, where $3 is the plain name without the full path
mv "$3" "$MYDATE $3"
What you want is impossible, you cannot put the date ahead of /volume1.
The first place where you can start is after /volume1/Downloads.
Also you're still using the date command wrong.