Sprites are always in front of the background, and pens draw on the background, so pens can never cover up sprites. You probably want to use the "hide" and "show" blocks to make sprites appear and disappear. If you have to sense touching the sprite, then hiding won't work for you, and you need to set ghost effect to 99 instead.
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My project with rubber stamps is good for showing erasers:
http://scratch.mit.edu/projects/kevin_karplus/12280
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