Should I be worried about low undergraduate grades during the COVID-19 crisis affecting grad school admission chances? I'm currently in my undergraduate junior year studying Mechanical Engineering at the University of Waterloo in Canada. I'm hoping to apply for Top 10 US grad schools in mechanical engineering in about 18 months. In response to the worldwide COVID-19 health crisis, our institution has (as have most academic institutions) switched to online teaching and made many changes to the structure of our courses to accommodate the situation.

As part of these changes, the university has offered students the option to selectively change the grade reporting on their transcripts to CR/NCR (Credit/No Credit) at the end of this semester. Normally, my grades would be pretty good (hovering around ~3.9 GPA) and I wouldn't bother to report my grades as a CR instead of as a percentage, but this crisis has completely disoriented me and made it difficult to focus on my studies.

Furthermore, the university has allowed instructors to retroactively adjust the course breakdown/weighting away from the original syllabus--this means that tests/projects that were originally worth 15% of the grade might have been increased to upwards of 40% weighting. This has had a negative impact on my course grades as well, as I was hoping to make up for poor showings on some of these lower-weight deliverables with strong final exam performances. Instead, these final exams are going to be worth much less now.

In the aftermath of these changes, I'm contemplating using the CR/NCR option on some of my course grades, particular with any grade that ends up lower than my current GPA. However, I'm worried about how this will be interpreted in my grad school admissions in a couple years. In normal circumstances, I think changing a percentage grade into a CR/Pass grade would be a red flag that a student's performance in the class was less-than-stellar.

Given the COVID-19 crisis and its effects on academia as a whole, are admissions committees two years down the road likely to be understanding if I decide to take advantage of the CR option now? Should I make use of it and explain that this was "the coronavirus semester" in my application package, or am I dooming myself by converting my grades from percentage into CRs?
The situation is chaotic and it is difficult to make a prediction or give firm advice. Either path could be better than the other, depending on the judgments of others. 

However, one prediction that I can make with confidence is that universities sending out grades will also be sending out explanations that extraordinary measures were taken in extraordinary times. Furthermore those receiving grades and such will understand that the situation was chaotic and that the ordinary procedures need to be modified. 

If it were me, I'd probably opt for the grades rather than pass/fail. If necessary, I'd just explain that the general chaos affected my performance somewhat and the grades may not accurately reflect my potential. I'd suspect that letter writers would back that up. But that is partly because I'd have a history of excellent performance generally and not one that would be questioned in the absence of the current situation. (This is the hypothetical me speaking, not the real me.)

But the pass fail option can also be explained fairly easily that the risks were higher due to general disruption and you considered it the safer option as the rules were changing, making earlier assumptions invalid. 

I expect that there will be more emphasis put on interviews and on letters of recommendation for a while until things settle down again. But that is just a guess.