My sugar mix is 1 egg white to 5 cups of granulated sugar. Works better than water. Dust molds with powdered sugar if sugar sticks too much. The molds work better too if you don't keep washing them after making the shells. Only tend to stick on the freshly washed ones. (I do wash mine after I am completely done making my shells for the season.)

To make my peep holes, I make a cut (not too deep) using a very thin knife (I like to use those small fruit knives) about where I want the opening to be. I then gently pat the sugar back down, so that there is no gap where I made the cut. This helps to keep this area from drying out too much. When I am scooping the sugar out, after drying, this section will often just fall off if it is on the end or side. The front one, I usually have to gently tap with the bottom of the spoon and break it loose. These pieces tend to be pretty dried out so do not reuse.  I just dump them, but keep on using the sugar that was scooped out.  I add small amounts of egg white to moisten as needed. 

After the shells are thoroughly dried, I then reshape the peephole area to match the scene inside. 

In the picture, you will notice I do sky behind the figurines. To keep the blue from bleeding through, I usually do a white coat of very thin royal icing. When this is dry, then I do the blue coat of the color I want. After this is dry,  I then put in the clouds by adding some white to the sky.  I use either a paint brush or my finger tip to wet the white royal icing in order for it to blend with the edges of the sky. 

When putting the 2 halves together, I use the fantail paint brushes and dampened them to smooth out the icing where they were joined as well as to fill in the seam on the inside of the egg. (I can usually maneuver the brush to go behind the figurines.)