I haven't tried using paper towels before, but what I did for LFS in a baggie is that I wet the LFS, and then squeezed off some of the water so that it's damp/moist and not wet. I put the seed in first at the bottom, and then put the LFS inside. And yes, then just spread out the LFS like a paste. Careful not to use too much LFS. And yes, 1:1 peat and sand is good for Sarrs.