Delete the existing duplicated shipping rules, then recreate them.
to charge different rates based on the category, you need to have a category column in the cart object, and in the add to cart button behavior store the category.
then you can create shipping rules that use the calculation:
"Based on items with a specific value"
total of "Quantity" where "Category" has a value of "Cushion" times "6.95"
and another rule for the towels:
total of "Quantity" where "Category" has a value of "Tea Towel" times "4.50"
You can add a cart display to the pages using the quick cart display type, this will show quantity, total, and a view cart button.