Answer: You can repair the spots by raking them to remove any dead grass and to roughen up the soil so your grass seeds will have a good place to land. Then broadcast seeds over the bare spots, covering the areas with a thin layer of peat moss. Water as often as needed to keep the reseeded areas moist and the grass should germinate in 7-10 days. You can mow as usual, avoiding as much of the new grass as possible for a week or two. Then mow the entire lawn as usual.
Mulch is partially decomposed organic matter. As long as it is inside a bag with no air circulating, it will continue to decompose, but it will develop fungus. This, too, is a normal part of decomposition. Once you spread the mulch, the air will kill the fungal growth. Its presence will not harm your mulch or your plants.
Best wishes with your garden!
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