Yes, sheet moss will kill your plants, and quickly . If they have only been in it for a week or two, i would quickly take them out, and wash off the whole plant with distilled or rain water thoroughly, and then let them sit in a dish of distilled or rain water until you can get more peat moss.

I do not see any problem with the set up you describe. Just what size of bark are you using? If you are concerned about aeration of the mix I would add an inert as a component to the mix. This could be large sized perlite or pumice or even styrafoam chips (packing chips). Since you did not mention depth of your mix you may want to consider using a coarse grade of charcoal on the bottom blended with a coarse inert with a depth of 1.5 to 2 inches and set into one corner of the tank a "tube" that sits on top of the bottom fill and extends just above the surface of the soil surface-it can be hidden by a piece of bark or the sheet moss. This would provide additional venting. The "tube" could be anything like even a yogurt cup with the bottom cut off.

It will likely turn brown as it dies. My guess is that "sheet moss" is any moss that is gathered from outdoors and could represent any number of species from any number of habitats.

Don't waste your money or time. Generally the bagged mosses are totally dead and probably dyed. But you can get some moss plugs from a retailer if you do not have a local source. Here is the best one for you: Callicladium Here is a link below that might interest you: Here is a link that might be useful: Mosses of New Jersey-list and brief info