I saw in the list archives that someone recently asked about using newer versions of Linux with Observium.
I am not an Apache expert, but I got it working by simply changing to "Require all granted" in the recommended Observium config:
root@observium:/opt/observium/includes# cat /etc/apache2/sites-available/000-default.conf
<VirtualHost *:80>
ServerAdmin webmaster@localhost
DocumentRoot /opt/observium/html
<Directory />
Options FollowSymLinks
AllowOverride None
</Directory>
<Directory /opt/observium/html/>
Options Indexes FollowSymLinks MultiViews
AllowOverride All
Require all granted
</Directory>
ErrorLog ${APACHE_LOG_DIR}/error.log
LogLevel warn
CustomLog ${APACHE_LOG_DIR}/access.log combined
ServerSignature On
</VirtualHost>