+1 to everything GGI said.
I too think that tracking people with lowered self esteem (so pretty much all vocalists) is all about making them feel at ease and sound great in their headphones. Compliment a good take, or simply give them a thumbs up in the pause of a nice run. It's amazing how much impact this can have on their performance. You will both walk out of there happier.
If a part doesn't work out after a few takes, suggest to move on to another part for now. Sometimes people just need a reset.
On the technical side of things, I too prefer the SM7 without the foam shield but with a popscreen in front of it, and I like to keep the EQ on it flat.
If you are familiar with it, it's also nice to track with a little bit of compression on the way in, or at least in a way that the vocalist can hear it. Especially on dynamic parts it can make it so the artist hears him/herself more consistently in the headphones. So far, everyone I've recorded has preferred this "rubber band feeling" over clean tracking.
If you like the way things sound through the microphone, but the sibilance is too strong, you can also try putting the microphone at a slight angle over/under their mouth, so the artist sings a bit "over it". Especially on females, this tends to sound a bit smoother to my ears.
EDIT: "Record everything" should be the first commandment in the bible. And when an artist tells you not to record something...record it on two channels!