This still doesn't work (at least in Plex it doesn't)
<playcount>0</playcount> = unwatched
greater than 0 is watched.
I've noticed the <watched> tag start to appear in newer nfo's so it might be new feature that isn't implemented yet. To be safe I'd change both <watched> to true and <playcount> to 1
While I'm on the subject, I noticed while testing this that you aren't resetting the watched/unwatched button if an nfo exists without a <watched> tag, you just seem to leave it as it is, it should change back to unwatched if the tag is missing.
Any resaon why you don't populate the <thumb> tag?
Great bit of software btw, well done! (any chance of a mac version?!?)