Wow, the fungus growth looks intense. It must be frustrating to have such poor germination as well as the struggling plants after putting so much time and effort into planting them. It likely is coming from either the garden soil or the compost, yes? I have wondered if the cow compost from Home Depot (I think Lowe's carries it as well) is safe. It isn't OMRI certified, at least the one I have seen at Lowe's, and I have a strong feeling is comes from factory raised cows who are being given all kinds of antibiotics and other pharmaceuticals to try to keep them alive until slaughter. I'm not sure it's a good idea to add manure from those situations into one's food garden. I am interested to hear what other people on here with more experience have to say about the fungal issue.
One thing I wanted to share, however, is my experience with using microorganisms to ward off fungus/mold. I happen to have used EM1 from TeraGanix, but am currently experimenting with a batch I am cultivating on my own. Anyway, I have been growing microgreens in relatively large amounts for about 4 years now. I grow them to sell so they are going 365 days/ year. One of the types I grow has a tendency to fungus and mold when the air gets warmer which causes the whole affected tray to do poorly and all the plants in it to die. Of course, microgreens are grown unnaturally with very dense seeding so there is always a higher chance of mold/fungus anyway, but here is the amazing thing that I have finally discovered (and am VERY excited about): When I spray the top of the soil and then the seeds after pushing them down onto the soil a bit with the diluted EM1 solution, there is no fungus/mold at all. None. Not only that, but all the microgreens are much happier looking, are growing faster and larger than when I didn't use the EM1. I was so impressed that I also started giving it to my dogs in hopes of having them digest their food more efficiently and that they will thereby need less (the jury is still out on that one). Anyway, I have decided that no matter what I am growing from now on is getting a spray of microorganisms first. I have often heard positive stories to do with probiotics and plants, but to experience it first-hand is always exciting!
I wish you all the best with your next batch of seedlings!