Um... This may be a dumb question on my part, but in the above, you had it in /scripts - did you move the file?
EDIT: Nevermind, I misread it and yes, it was a dumb question. I just realized what I read and what I thought I read.
Can you remove the first argument ($1) and then try it?
Sorry, food was calling.
I'm looking it over now... give me a few minutes if you don't mind.
I keep telling you...
I.
Am.
NOT.
Food!
I understand what your trying to do, but if you scrolled down in the first link it provided a script that should perform what you are looking for complete with the desktop entry.
#!/bin/sh
# call this script with domainname as parameter
# to start domain and open viewer
/usr/bin/virsh start $1
# domain must be known to virsh
/usr/bin/virt-viewer -w $1
# -w to wait until domain is running.
This script takes the domain as input ($1) from the command-line... so you would call:
sh vm.sh [domain-name]
In your script above you call the domain Xubuntu... is this correct? Remember capitalization counts. You can hardcode it like that but defining the domain at the terminal when called allows for change. Matter of choice.
The desktop file looks OK... tilde is an alias to /home/$USER/ directory
Your missing something... an = after connect, no spaces.
So your script should read:
#!/bin/bash
virt-manager --connect=qemu:///system --show-domain-console Xubuntu
True, I just prefer full path because it is easy to miss a whitespace after tilde.
Thanks so much for replying @337harvey . It's actually working now (mostly). Moved the script and icon to a folder in the /home/ directory, and just removed the ' ' around the directory names and it's working and have it on my dash dock no less!
Only, for the life of me, I cannot get the png icon to show. Any ideas?
Right click it, choose properties then click on the left image and browse to the .png file. Click ok
Which script did you use for anyone else looking for the solution?
Actually, it's working now, without the = . It was the ' ' around the directory names. Just can't get the icon to show.
Well, it was a part of the command... sometimes those things are written to be omitted on occasion. Up to the developer
Okay, so maybe it isn't totally working. I can't get it to work on the actual desktop as a shortcut. But it working on the dock... 
I can't access the properties by left click when it's on the dock. So it's basically an invisible space holder right now, lol.
Agreed. I'll post what I put together for the full script + shortcut code as soon as I have it fully functioning.
You can adjust the icon on the desktop then add it to the dock, (drag and drop)?
Is the dock a snap or flatpak?
For the icon, try just
Icon=kub.png
Place the icon in /usr/share/pixmaps (you can try without moving it first if you want...)
Test if that works.
Not icons folder?
/pixmaps is better as in /icons, there's generally a theme.index, whereas /pixmaps is General Resource.
EDIT: Re-reading this, I see I generally generalized this too much.