The most likely reason for you feeling worse is leftover dust from the work performed. That will include dust from the drywall, from sanding the filling and especially mold particles from the disturbed wall. The room may look clean, but replacing drywall will produce a lot of tiny dust particles that will settle everywhere and make an allergic person feel really bad until the dust is removed.
It might also be allergy to the new paint components and if that's the case then the paint has dried by this moment and you'll feel better.
So the number one thing is to clean the room thoroughly - wipe everything where the dust and mold particles may have settled at least twice.
As to painting over. Latex paint will form soft yet rather strong film that will bond and contain the mold for a while. If there's any amount of humidity and mold is indeed in the wall then mold will continue to grow and will likely resurface at some moment. However until that happens you can feel more or less safe - the dried paint is like soft plastic covering and containing everything.
Mold goes away when the water goes away, so unless your toilet is leaking again, you have some other source of water or leak on the upper floor. This could be any number of things, even things not plumbing related, like water getting behind the siding, or a leaking roof with water running down the inside walls. As far as killing the mold that is there, I wouldn't waste my time. If you don't correct the water problem then the mold will return very shortly.
I need to figure out if there's still a leak or some kind of humidity problem. Is it safe to assume that because the problem got worse there is? Should I try to find the pipes and see if they're leaking?
Since you have had issues with the toilet in the past that would be the first area I would check. If the drain pipes for your upper floor are leaking then I would expect to see discoloration bleeding through the paint on the ceiling and the walls. If this turns up nothing then in the hole you have already cut, I would get a professional moisture detector device like the one a plumber would use.
These can help detect moisture and humidity in the air which can give you clues if you found the potential problem areas. Don't buy a cheap one because they don't work very well, I would instead see if a rental place will lend you a good one.
I think I'm seeing some black wood in there (need a better flashlight!).
This doesn't necessarily mean anything, it could be discoloration from previous water damage.
I would still like to hire someone to fix the plaster ceiling. Is it going to cost a huge amount extra if I cut through the mesh and they have to replace some of it? Does area make a massive difference in price for that kind of job? For what it's worth, I'm fine having drywall put up instead of plaster.
How big is the hole that you had cut? You can sometimes repair a hole by cutting a small piece of drywall and fitting that back in place, then using some thinset or spackle around the edges. Sand and repeat thinset or spackle two or three times until you have a smooth paintable surface.
Best Answer
I would not replace the drywall for 1 short term “flood” We don’t know what kind of drywall at this point, water resistant can actually Handel water better than standard Sheetrock, my concern would be more getting it sanitized more than mold but it sounds like you have cleaned it up, if you don’t see wrinkles going up the wall the Sheetrock was probably not affected. When you see wrinkles were the gypsum absorbs the water and swells that’s when Sheetrock looses its strength but that takes some time.
I think you are fine to leave it in place.