"Shoulder above the soil line" applies but to mature bulbs. With smaller bulbs, there is a risk that the roots might dry out frequently.

okay, thank you, so it is best to keep the bulb covered with soil at this point

I have grown Hippeastrum from seeds for several years, and here’s my observations:

First question: That is totally normal for them to replace leaves like that. The bulb expands from the inside out, and as a leaf dies its base becomes one of the outer layers of the bulb. The leaves have to die in order for the bulb to continue to expand, and I know it looks worrying to see the leaves die so often, but as long as it is producing new leaves I take it as a good sign that the bulb is growing more layers and getting thicker.

Second question: I have found that they like to dig themselves down into the soil so that the “shoulders” are buried. Based on trial and error I have found it is just best to leave them alone and not try to dig them up or disturb them in any way until they are larger (about the size of a pea or small bean seems to be ok). I lost many seedlings doing transplantation when they were too young, and now I that I leave them alone I rarely lose them once they sprout, and they do survive being transplanted. I know it is bad to get water in the neck of a bulb, but when they are that small it seems the water does not fit inside there and they don’t care if a little spills on them during watering, provided it drains away quickly.