I confirm: to try to embed a database into an assembly does not make sense if the purpose is to hide it.
As an assembly is a static structure, no bit can be changed in it. So something as dynamic as a database definitely has to be taken out of the assembly before it can be used.
In order my users not to see the database I am using, I opted for the solution to copy it into the &AppData&
directory. Not very secure (despite the password protection) but at least not obvious.
Have a look at this answer to see how.