How do I replace line-by-line text of a file in C?

I have been researching this for a while and haven't been able to find anything that helps my specific case.

I have a function in which I need to encrypt text in a file. What I want to do is to read a line from a text file and store it into a string, run an encryption algorithm on the string and write the encrypted content of the string back into to the file. That is, I want to replace the file's current line with the encrypted line.

Here is what I have so far:

int encrypt_file(char file_name[]) {
    FILE* file = fopen(file_name, "r+");

    if (file) {
        char line[300];
        while ((fgets(line, sizeof(line), file)) != NULL) {
            fseek(file, -(strlen(line)), SEEK_CUR);
            encrypt_string(line);
            if (fputs(line, file) == EOF) {
                printf("Error. Please try again.\n");
                fclose(file);
                return 1;
            }
        }
        fclose(file);
        return 0;
    } else {
        printf("Error. Ensure file exists and try again.\n");
        return 1;
    }
    fclose(file);
    return 0;
}

To explain my logic, I read the line from the file and then use fseek to move the pointer back by however many characters were read (it should now be at the beginning of the line). I then run the algorithm and then write the new string back into the file.

However, this code gives me an infinite loop. When I remove the fseek, it doesn't give me an infinite loop and it shows me that the algorithm has been correctly used on the string, but it shows the "Error. Please try again.\n" response and no changes have been made to the file itself.

Any help is appreciated.