When you water, you really shouldn't water the wood. That just invites mold and judging the wood from that picture, I have a feeling it could mold easily. Aim to just get the substrate and preferably away from the spot where the wood is touching the substrate.Oh, regarding the moisture, I had just watered a bit. I don't keep it real wet, and I'm not sure but I think there's enough ventilation.
Also, I don't normally just water that side. I was only able to water that side cause my T was on the other side and up against the lid and I couldn't move it.