mildew can cause issues in most animals and I am quite sure snakes are affected too. The problem with mildew is the microscopic spores that are release into the air which can act as an irritant and allergent. A good cleaning with a bleach solution and proper air out time to ensure all bleach fumes are gone and any wood components are well dry (a good 24 hours in a dry location, like out in the sun on a day with little humidity works).
All wood in a cage should be well sealed (most sealents once completely dried and cured, are no longer producing any harmful fumes. Any urathane etc. that is safe to use indoors should be fine for snakes, if allowed to completely air out (product usually gives full cure times on the bottle).
Keep in mind that for a healthy environment a cage does need to be able to dry out completely on a regular basis, if its damp all the time and air circulation is poor, mold and mildew will florish, as well as bacteria. Though rainbows do need a fairly high humidity, they don't need their cage soaked either. It takes some care to find a good balance betwine sufficient humidity for the snake without the cage being constantly damp.
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PHLdyPayne