Sphagnum, pronounced as if spelled with an f; I've never heard it said any other manner. And yes, the important part here is that the spelling is a scientifically correct and accepted genus/general species name, and misspelling it either can cause irritation and arguments (as it has to an extent here) or mislead others, which is a terrible thing to do in a hobby already rampant in misidentification and incorrect terminology, and to say it with a similarity to the proper spelling will help avoid that. Some things are tolerated, but if someone notes the proper it is respectable to at least listen.
In regard to the original question asked: anything in the sphagnum that isn't removed by boiling is probably more of a concern than what is; minerals and excess nutrients are going to stay in there, and after boiling the cell walls of the moss are going to be further broken down, allowing other undesirables to colonize faster and capitalize on the now more accessible nutrients there. Better, if you're concerned with impurities, to soak and rinse the moss first before you use it.