Should TT be showing a penalty and excess contribution on my withdrawal and subsequent repayment of IRA funds, all within the allowable 60 day period?

Do not enter a rollover as a contribution in the IRA contribution interview (delete it if you did). You will enter the rollover only in the retirement section. 

If the code in box 7 doesn't indicate a rollover then you can indicate it in the follow-up questions:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “1099-R”
3. Click on “Jump to 1099-R” and enter your 1099-R
4. Continue "Tell us if you moved the money through a rollover or conversion" and select "I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)"
5. Continue answering the questions.