So here's the problem: You're trying to use variables before you've defined them. Renpy reads code one line at a time and it goes in order from top to bottom. If you want to display the day and time instantly after starting a new game, you need to define the day and time before the game starts.
What you can do is move this code:
output = day_name[day] + " " + str(hour).zfill(2) + ":" + str(minute).zfill(2)
to where you define output so it looks like this:
define output = day_name[day] + " " + str(hour).zfill(2) + ":" + str(minute).zfill(2)
If you try to run the game now, it will crash because all of those variables you want to reference (day_name, day, hour, minute) have not been defined yet. You can fix this by defining all of those variables BEFORE you define output:
define day_name = ["Monday", "Tuesday", "Wednesday", "Thursday", "Friday", "Saturday", "Sunday"]
define day = 0
define hour = 12
define minute = 0
define output = day_name[day] + " " + str(hour).zfill(2) + ":" + str(minute).zfill(2)
Or if you just want a quick fix, define output as whatever you want it to say right when the game starts and leave the rest of the code alone:
define output = "Monday 10:00"