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Your tree may have experienced stress, gone into dormancy, then when conditions improved, came out of dormancy and bloomed. (just like spring)
This is not uncommon and you should still have buds left to bloom in the spring.
Check whether cultural needs of the fruit tree are being met.

https://www.gardeningknowhow.com/edible/fruits/peach/peach-tree-pruning.htm

The bad news is that if your peach tree was grafted, your tree that grew from the roots probably was the rootstock your peach tree was grafted onto and not a suitable cultivar itself.

Here's an article that explains these terms and concept of grafting:
https://content.ces.ncsu.edu/grafting-and-budding-nursery-crop-plants

You can start over with a new tree, or consider using grafting technique to acquire and graft a selected desirable "scion" on to your existing tree.

That is a bacterial spot. A severe one, I might add.

This article will explain: https://www.gardeningknowhow.com/edible/fruits/peach/bacterial-spot-on-peach-trees.htm

There will be no treatment, though what you have done is accepted as one of the best things to attempt correction.

If pruning severely doesn't help for next Spring, then you may be looking at complete removal of the trees.

You may want to contact your local extension service, as this can spread to the area nearby, killing other trees elsewhere. They can help you to remedy the situation.

This link will help you to find the closest extension service to you: https://www.gardeningknowhow.com/extension-search

If you have left the outer stone on the seed, then this could take months to fully dry out, since they will take months to soak up enough water to germinate that way.

There is a much faster way, should you choose.

Just wear gloves, as all of the members of the genus, Prunus, will contain prussic acid (Hydrogen cyanide) in the seed once you get the shell off. It will only take a couple of weeks to germinate with the shell off.

This article will help: https://www.gardeningknowhow.com/edible/fruits/peach/planting-peach-seeds.htm

I'm sorry, your photo did not come through. It will be difficult to say without seeing the damage, but the description sounds quite like Witches Broom. This article will offer more information: https://www.gardeningknowhow.com/ornamental/trees/tgen/witches-broom-disease.htm

If they are still very small I would go ahead and pot them up but leave them inside. Next spring you can move it outside.

https://www.gardeningknowhow.com/edible/fruits/peach/planting-peach-seeds.htm