Thermometers can b so frustrating! No..it should not rest on the egg or touch anything. The sensor should just dangle. It's always best to use a couple of thermometers. I keep 2 in my bator that show temp & humidity. I generally incubate @99.7 w humidity @ 40% then raise humidity to 70% when they r due to hatch. Sounds like u have a humidity issue. If the eggs are to dry inside they can't pip through..or rotate in the egg to hatch.