  We study the crystalline and electronic properties of the
$\textrm{Fe}_{1-x}\textrm{Co}_x\textrm{Se}$ system ($x=0$, 0.25, 0.5, 0.75, and
1.0) using X-ray diffraction, X-ray spectroscopy and density functional theory.
We show that the introduction of Co $3d$ states in FeSe relaxes the bond
strengths and induces a structural transition from tetragonal to hexagonal
whose crossover takes place at $x\approx0.38$. This structural transition in
turn modifies the magnetic order which can be related to the spin state. Using
resonant inelastic X-ray spectroscopy we estimate the spin state of the system;
FeSe is found to be in a high spin state (S=2), but Fe is reduced to a low spin
state upon Co substitution of $x \le 0.25$, well below the structural
transition. Finally, we show evidence that FeSe is a moderately correlated
system but the introduction of Co into the host lattice weakens the correlation
strength for $x\ge0.25$. These novel findings are important to unravel the
mechanisms responsible for the superconducting state in iron-chalcogenide
superconductors.
