I haven't noticed any mold around the inside of the pot, but then again, once planted, I have not taken them out to see if there was mold inside. I use the newspaper to line a regular pot so that it is easier to transplant to the soil without bothering the roots. The newspaper pot gets buried into the soil eventually, and becomes compost. So I don't see any problem with that.

I have not had mold with mine. I check them everyday and only water lightly when they look dry. They have shoots but not too many leaves, so I figure they don't need too much water right now. The sun gets really hot in that window: I would find it hard to think that mold could grow there.

I think maybe you are watering too much.