The line between the pair of points common to the normal and the parabola is the chord formed by that normal.
I tried solving this problem using calculus but I was unable to solve the equation I got from the derivative. Is there a better solution, perhaps using a geometric argument?
My attempt:
I came up with a function for the length of the chord passing through the point $x$ by finding the equation of the normal at $x$, then finding its points of intersection with $y=x^2$ and finally finding the distance between those two points, which came out to be
$$L(x) = \sqrt {\left( 2x + \frac{1}{2x} \right )^2 + \left ( 1 + \frac{1}{4x^2}\right )^2}$$
The minimum of $L(x)$ conincides with the minimum of $L(x)^2$. Hence, I tried to minimize $L(x)^2$. I attempted to solve $\frac{d}{dx} L(x)^2 = 0$ for $x$ however this problem reduced to solving $32x^6 - 6x^2 - 1 = 0$, which I was unable to solve even after substituting $t=x^2$. I plugged the equation into Wolfram to get $x=\frac{1}{\sqrt{2}}$. So the shortest chord must be the line formed by the points $\left(\frac{1}{\sqrt{2}},\frac{1}{2} \right)$ and $(-\sqrt{2}, 2)$.
Your work is right.
You need only to end it:
For $x=\frac{1}{\sqrt2}$ we get a value $\frac{3\sqrt3}{2}$.
We'll prove that it's a minimal value.
Indeed, we need to prove that $$\left( 2x + \frac{1}{2x} \right )^2 + \left ( 1 + \frac{1}{4x^2}\right )^2\geq\frac{27}{4},$$ which is $$(2x^2-1)^2(16x^2+1)\geq0.$$ An equation of the normal it's: $$y=-\frac{1}{\sqrt2}x+1$$ for the touching point $\left(\frac{1}{\sqrt2},\frac{1}{2}\right)$ and for $\left(-\frac{1}{\sqrt2},\frac{1}{2}\right)$ it's the similar.