As far as I'm aware, the £5 label would have covered you for any loss. It's all part of Simple Delivery. I'm sure someone can correct me if I'm wrong. Was the £32 Signed for postage and insurance paid for in addition to the SD label? Or did you purchase it separately?

Only the SD label's tracking number will have been linked to the item. You would have needed to contact customer services and had the Special Delivery tracking number added manually in it's place. eBay are checking the (I'm assuming) unused SD label, which still has a message of "we're expecting it".

Your payment is likely going to be released in the next few days, as the 14 day hold will be almost up. Though, I believe, they can hold for 30 days if a seller is new; again, someone more knowledgeable on here will know better. If you do decide to try and release it sooner, then you really need to make sure the tracking number is correct, as the one provided in one of your messages above has incorrect and/or missing numbers/letters.

I don't know if you'll be able to have that feedback removed for your buyer, but I would definitely consider adding an edited comment below the one you left, apologising for accusing your buyer of non payment. The buyer did pay, otherwise you wouldn't have been able to generate the £5 label. It was eBay who holds the payment until they can prove the buyer received their item and there is no sign of any problems.

I'm sorry your first sale has caused so much stress.