Q. Am I ok not reporting the 1098T because it was directly offset by tuition costs?
A. Yes, as long as you didn't also use those same tuition costs in calculating how much 529 distribution to take. You have to use separate (from the expenses the scholarship covers) expenses when calculating a 529 distribution.
You haven't mentioned whether you are eligible for the tuition credit (your income is not too high). Don't assume you are not eligible for the credit just because scholarships and 529 plan paid all the expenses. There's a way around that (probably tax free, or at least low tax).
