Sounds normal to me

Puppies learn about bite inhibition (how to use their jaws
gently) from precisely the behaviour of your puppy. When one is too rough or bites too hard, the bitten puppy shrieks in pain and retreats - ignoring the biter and refusing to play with him. So the over-enthusiastic biter learns to be more gentle if he wants anyone to play with him.
Those people with only one puppy have to teach bite inhibition themselves - and do so by exactly the same method: shrieking in "pain" when the pup bites, and ignoring him for a few minutes refusing to play (and, btw, that's what you should be doing as well if
either pup bites too hard when playing with you). They need to know that human skin is fragile
Within reason, yes it's the right thing to ensure that the retreating puppy gets peace in the crate when she retires there following over-enthusiastic play by the rougher pup. So long as she doesn't spend an excessive amount of time hiding. But from your description, she doesn't sound overly shy. Just a puppy reacting normally to a rough littermate.