In the UK we're obsessive about the weather so I consider myself a barrack-room expert (i.e. I know very little).
I think the garage would be the best, but
only if the humidity is kept low (otherwise it could make things worse). The following link - dew point calculator is really useful. If you've got mould already then you need to solve this first. And get a humidity meter to be assured that you have. What you need is either lots and lots of ventilation (and some heat) or alternatively & even better a dehumidifier with no / little ventilation.
http://www.dpcalc.org/index.php
There's some other options such as indoor and outdoor caroons. Personally I wouldn't trust them as I don't understand the physics of recirculating ambient air (which is potentially moist), but some claim they work ok.
http://www.carcoon.com/
Or a sealed bag effect, which makes more sense to me, but is a lot of dough and probably aggro.
https://www.autopyjama.com/permabag-uk/
Personally I've gone for a permanent plumbed-in dehumdifier and tried to seal the garage (albeit only sealed over winter) with 3" thermal boards wedged tight against the garage door and taped to make it as air-tight as possible (in order to stop dehumifiying the world) plus a 100w tube heater underneath. I've no idea if I'm doing the right thing, but the science of it makes sense to me. It's maintaining a humidity of 30% +/- 5max. which is pretty good. The heater is only there to stop any moist cold air that does manage to get in from condensing on cold metalwork. By the way the type of humidifier that's best is the desiccant wheel type of dehumidifier as these continue to work in low temperatures whereas others don't. Depends how cold it gets.
I've learnt the hard way as before I did all this I kept another car (not a 124 I'm glad to say) in the same garage with nothing but ventilation through the fairly draughty door. Fighting rust was a losing battle. Then was given a digital humidity sensor and left it to log data for a week. It recorded 80% RH which shocked me as until then I'd been living in ignorant bliss and made me realise that I'd been culpable in cause the poor cars demise...
I live in the Midwest and we do have some wet conditions in the winter, but never more than a few inches of snow or a sheet of ice. Would it be appropriate to store the car outside with a cover or do I need a garage? We have a spare garage in the basement of our house, but I've found mold in it and I'm worried it wouldn't be good for the car.
Put the car on jack stands under the front lower ball joints and on the rear axle to keep the tires from taking a set.