Hmmm...well, the seller did overcharge you, but you agreed to the auction's terms (including her $7.50 rate) when you bid/won the item. You already suspected the seller's shipping was particularly high (considering how close the 2 of you live) so you tried to negotiate, but the seller didn't budge. If the $7.50 quoted shipping wasn't to your satisfaction from the start, then IMO, you should have bypassed the auction altogether. ...If I was the seller in this situation, I'd be rather miffed the buyer's coming back to inquire about a shipping refund...
^^This.
Fees are clearly outlined in the listing and buyers agree to them when they bid. If the item arrived damaged due to improper packaging that would be a separate issue and still not directly related to fees charged - more irresponsible/inadequate handling. IMO, if the item was received within the agreed-upon timeframe then there's no reason to ding the seller as he/she delivered on what both parties agreed to.