I just use cheap white plastic ones, like $1.50 for 25 of them. First you need to punch some drainage holes through the bottom. I find that about five or six holes 5-6mm in diameter works well. After that fill your cup up so that when you place the pellet on top it is nearly flush with the top of the pot then fill in around the outside of the pellet. Give it a tap on the bench to settle th...
Ok, i put mine into cups using a mixture of seed raising mix, coxo coir and perlite as soon as i see the hook emerging. From there they go straight under a fluro light. I recommend you put them in cups as soon as you see the plant break the surface.
What colour is it? It could be a case of over watering, sometimes a greenish kind of mold shows on the surface of the dirt but doesn't seem to hurt the plant. Fungus issues ca be controlled with H2o2 which is hydrogen peroxide but this also kills beneficial microbes in the soil. Do you have any pics of this?
I just put my seeds on a paper plate or in an envelope and put them somewhere with a little warmth and air flow. After that you want to store them in an air tight container in a cool dark place. Fridge is ok but not freezer. Seeds will last years like this. A bit of silica gel in with them keeps them dry too.
Sorry about the short reply before but i was in a rush.