Be aware that your defroster will not work properly without the A/C. You have a different heater/defroster unit than a Jeep built without A/C, and it uses the evaporator coil to dry the defrost air, then heats it.
In fact, every position on the selector knob marked with the "sun" symbol should engage the A/C compressor intermittently. If yours is cycling on/off every 10 seconds, it means you have low refrigerant levels, and that is an easy cheap fix.
Avoiding the smell is simple. When you are running the A/C, anticipate the end of the ride by 1-2 miles, and turn the A/C OFF and the blower to HIGH. This drys out your evaporator coil, and a dry coil avoids the mold growth that causes the smell. A/C OFF means that the selector knob is in a position without the "sun" symbol.
DON'T take anybody's advice to spray Fabreze, Chlorox, or even the aerosol A/C cleaner into your Jeep. All of those eat up the aluminum parts and a pinhole developes which causes the refrigerant and compressor oil to spray out, ruiing the entire Jeep dash and interior.