They should be spread out just a bit, but, yes, each gets it's 1d4 attacks at 10'.
Thing is, Either everyone should fall, or only ONE party member should fall...
- If it's everyone, no one is getting more than 3 attacks, and usually only one, and running through is a suitable defense.
- If it's just one, a smart party has a tank or two up front. By this point in the adventure, the tank should be level 2 if not 3 or even 4... so 16-30 HP, and should have AC at least 16, possibly up to 20 (20=Plate & Shield, 19= half-plate, dex 14+, and shield).
Also note: to not be targetable after it's moved, the Violet Fungus would need a hide roll. And it's not going to succeed at one. (If it does, tho', it's safe from being attacked.)
The way it's worked out for me has been fighter goes down, initiative is rolled, fighter usually survives 1-2 hits, then disengages and gets out of range.
As for the CR 1/4... HP 18 is base of 1/8. AC should be 13, but is 5, so 3 steps down. No save DC. so, effective Defensive CR is 0. Offensive CR base is 1 for 11.25 per round, but AB+2 is -4 rows, so, down to 1/2. Average the two, 1/4.