GFCI won't protect against a conductor shorting the neutral and hot. It WOULD trip if the outlet were installed with the ground up,and a flexible conductor, say a necklace, fell between the plug and the receptacle.

Yes, recessed or covered receptacles would be a better option, for some values of better. I mean, most people wouldn't accept covered receptacles in their living space because they are "ugly" and would prevent many pieces of furniture from being placed in front of the receptacles (which by code are spaced every 12 feet at the most). And recessed receptacles are going to be a tight fit in most existing residential boxes. Forget smart devices fitting recessed, it's hard enough to fit those into regular boxes once you add some wire nuts back there...

So, yes, there may be some more effective options, but installing devices ground-up reduces a not uncommon hazard without resorting to changing out boxes or adding covers to everything.