My daughter broke out in welts, but tested neg for shrimp allergy. Why?

Depends. Not all "tests" are 100% reliable in predicting future issues with an item but due rule out some of the more worrisome reactions. Your "shrimp" exposure may not have been only shrimp. These are often prepared with a variety of spices (shrimp boil) all of which can separately trigger an allergic response.