En is indeed referring to the book. It is normal for the me to come before en. When there are multiple object pronouns en is closest to the verb¹.

Another way of writing the sentence would be:

Je n’ai pu y tenir ; je suis entrée ; mais le titre de ce livre me paraissait si ridicule que j’hésitais à le dire au commis.

or

Je n’ai pu y tenir ; je suis entrée ; mais son titre me paraissait si ridicule que j’hésitais à le dire au commis.

En could also be omitted:

mais le titre me paraissait si ridicule que j’hésitais à le dire au commis ;

without really impairing the comprehension of the sentence because the context is clear. But to my ears the sentence sounds better using en.

En paraitre is not a set phrase as far as I know, I haven’t been able to think of a single instance where en would not be justified in the sentence, it always represents something that has been named before (or will be named soon).

^{1 Usual order of object pronouns:
direct object (1st or 2nd Person) and se , direct object (3rd Person), indirect object, y, en. Here’s a good recap.}.