You're drowning them. Plants should NEVER be in constantly-wet conditions unless a) they are cattails or b) you grow DWC.
Also Rockwool must be pre-soaked to pH 6 before use, and peat pellets become mad acidic when they are kept constantly wet and both problems can kill your seedlings.
You are using the wrong kind of light. You need CFLs, Tube flouros (daylight or cool white for either), or a MH.

You gotta read the grow guide linked in my signature.