I agree-- looks like your peat pots have been way too wet for too long. Where are you located? By the size of your
seedlings, I'm guessing you might be able to start hardening them off if you started the
seeds 6-8 weeks before last frost. Being outside in the breeze and sunshine for a few hours a day will solve a lot of the over-watering problems, and transition them to the "real" world.
(I'm not a newbie, but I understand. You raise them up, nurture them, pamper them, and then you have to put them OUTSIDE exposed to the elements!?! AUGH!! Alas, they can't stay babies forever.)
One other thing-- after you've hardened them off, and when you are ready to plant them, go ahead and bury (plant) the stem to the depth of the remaining leaves. What I mean is that if there have been 1-3 sets of leaves that have fallen off, leaving just a stem, plant ALL of that bare stem. Above the ground your plants will appear shorter than they were in your peat pots, but beneath the ground the tissue in that stem will differentiate into root tissue! This is a good thing.
Congrats on doing
seeds!