No HPS or MH until at they've been above ground for at least a week, and at that point be quite careful with the distance.

As far as the peat pellets - they work for some seeds. But they don't drain very well and so you'll get more seeds that die from drowning roots. I like to use a mixture that's made with peat moss, perlite, and vermiculite. It drains pretty well but holds moisture great once you've soaked it in water for a bit.