K8420answered grow question 3 years ago Yes, definitely over watered. Don't worry, just don't add any more water and she'll recover. The seedling needs a lot less water than you think and is a easy mistake to make.
I would recommend not to cover the stem with any soil, actually keep it as clear as you can. If you cover the stem, there might be bugs in the soil/mulch that could potentially damage the small seedling. At this stage, the stem is very soft and easy for bugs to bite into.
I wouldn't worry too much about the shell, it's on the cotyledon and not on the leaves so shouldn't be an issue. If you do feel like you want to remove, put a drop of water or two (just a drop, nothing more), to soften it up a bit and it should make it easier to remove.
Hope it helps.
Good luck with your grow mate.