I found the towel on top of tank thing works worse than nothing at all. Towels are meant to soak up water so.....I dunno maybe others have a different experience with it.
They do in fact need fresh air. You wouldn't want to cover the entire tank with anything. It will be very difficult for you to regulate humidity and such in a tank. Difficult but not impossible. The only solution I have found is making a plexi-glass lid. But then the ventilation goes down and I have noticed that causes mold sometimes even when its clean, and it smells. I didn't want my BP living in that if I wouldn't so I bought a clear rubbermaid.