I let my seedlings grow out of the seed before I put them in dirt, (two leaves pop out at the end and it usually breaks away from the seed they are usually an inch long), I then put them in dirt and leave the top just a little above the dirt. This has worked real well for me, just don't touch the roots. You'll wreck em in a hurry. I would assume a MH if little ways away would be alright, I'd recomend a CFL right off the bat till they have a little growth. Open the container that you have the seeds in daily to air it out a bit.