Mine sometimes has mildew on the top that looks just like yours. It hasn't caused any difficulties for me.
I just started three large trashcans of tea this morning. Mine has, at its worst, smelled like a farm or horses to me. I never had the terrible stink people talk about. Now, I can't smell much so it doesn't matter!

Yes, remove the mold, use when you can. The smell comes from the brew becoming anaerobic, there was no air being brought into the mix.

I just buy Alfalfa pellets from the feed store and put it in the planting hole or work into top layer around the plant. Saves alot of time ( and mess) and acts as a slow release as it breaks down. I learned that from our regional president of ARS so figured it must work- and it does!

I second the method of dressing the plants with alfalfa pellets...I heard this from experienced gardeners. One day in the pet store we bumped into an old friend of my DH's, she was there to buy the pellets for her roses, then DH told me the rose growers around always use this method. Next year instead of buying rose fertilizers I will simply buy some alfalfa pellets and miracle grow...plus we make great compost every year.