Yes, that is mold. Yes, it is harmful and hard on your lungs. I wouldn't smoke it. No, you can't get it off as it is inside of the buds probably as well.

The only thing you can do is make some oil with it. You could smoke it, but not recommended.

I don't see why people want to moist up their bud anyways. It's all going to burned up anyways, so who cares.

As well, you don't re-moist herb then put it in an airtight container for 3 weeks. Of course you're going to get mold.