There are two reasons (As far as I know) for sealing the entire thing up. The first is to prevent contamination, and the second is to prevent oxygen from getting to the beer. Whether or not it is sealed will have no actual effect on the fermentation. However, if it is not sealed properly, the airlock wont be bubbling as much (or at all) because the excess CO2 will be escaping through the area that is not sealed instead of the airlock, and for somebody who uses the airlock as a guide, it will appear as if less fermentation is occurring.
You say that you see krausen, that means that the yeast are fermenting the beer, so you should be fine. Just give it time.
Did you take a hydrometer reading before you pitched the yeast? The only real way to tell if fermentation has completed is with before and after hydrometer readings. Looking at the airlock can be used as a guide, but I wouldn't trust it.