We study the crystalline and electronic properties of the $textrm{Fe}_{1-x}textrm{Co}_xtextrm{Se}$ 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 $xapprox0.38$. 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 $xge0.25$. These novel findings are important to unravel the mechanisms responsible for the superconducting state in iron-chalcogenide superconductors.
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