I despise peat pots or any of the little seed starting things that have mesh. Peat pots can wick and I have found they are either too wet or too dry. The mesh pots will restrain root growth. When I tried them, a planted out seedling would keel over and upon inspection roots never made it out of the mesh.
For the mold - too wet. Spray lightly with a solution of 10 % bleach and water. That should kill the mold.
You could try a small fan. I run one constantly (on a timer) on my seed trays.
