"I miss read that I can contribute 3550 for myself and my wife can contribute 3550 for her and for our daughter"
Actually, if you had done just this, you would have been OK, but instead you made the somewhat common error of contributing against the Family limit for your spouse ($7,100) and against the Self-only limit ($3,550) for you. As you now know, your two share the $7,100 Family limit and that's all.
So you two did have separate HSAs? Good.
OK, the way the Family limit works is that you two split the $7,100 limit between your HSAs any way you like. So you could actually consider the whole $7,100 as applying to your wife's HSA. In this case, only you have the excess contribution of $1,350.
Of course, I don't know if you still have $1,350 in your HSA to withdraw. But there is no need to withdraw $3,550 from her HSA just to reload $2,200 into your HSA. Just withdraw the $1,350 from her HSA and be done with it. Since both of you can cover the same people from your HSAs, it really doesn't matter a whole lot which HSA the money is in.
"1. Is my understanding on how to fix this mistake correct?"
As I noted above, you can just withdraw the $1,350 from her HSA and be done with it.
"2. How do I calculate the "Earnings on Excess contribution" of $3550 ? "
You don't. Instead, call her HSA custodian (or just look on the website for the online form) to request the "withdrawal of excess contributions" (use this exact phrase) of $1,350 and the earnings associated with it - let the HSA custodian figure out the earnings.
They will send you a check for the $1,350 and the earnings. The excess is being reported automatically by TurboTax on line 8 of Schedule 1 (1040) as Other Income (IF it was a contribution on a W-2), and another 1099-SA will be sent to you early next year with the earnings which you will add to your 2021 tax return for you to report it as income and pay tax.
Make sense?
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