I am attempting to start seeds indoors. I use a styrofoam block with 18 holes in it; these holes hold the soil plugs, 1 plug per hole.

I put the blocks in the tray and as per the instructions bottom watered. I wasn't comfortable bottom watering as they would be standing in water for hours on end.

I also put a plastic plant top on because it says on the instructions w/the heat mat I'm using it helps to keep the soil moist and keep the temps warmer, allowing for faster germination.

When I bottom-watered I noticed white 'fuzz' in the holes. When the seeds 'germinated' yesterday there was the same white 'fuzz' on the stalks. They weren't healthy looking either; they didn't pop out of the holes and they were a pale white.

Is this white fuzz a result of over watering/soil being too moist?

I know people recommend bottom-watering but whenever I use this method I get problems like the ones listed above.

They (soil plugs and planting blocks) are currently under the grow lights on the heat mats airing out.

My other question is this; some people recommend taking the top off once the seedlings germinate to avoid too much heat and moisture building up. Should I do this prior to the seeds germinating so the plugs don't get too moist or should this only be done after the seedlings have germinated?