You generate your moods as a result of the influences of environment, physiology, and your ongoing mental state (itself a product of the influences of environment and physiology). What other source of moods do you think there could be?
Yes, indeed. Subjectively, we have the experience of free will because we act according to our desires, motivations, moods, etc., and we have very little insight into their origins - except for obvious cases like being grumpy because of some problem, anxious because of some upcoming difficulty, happy because of some positive event...
If our thoughts are deterministic but unpredictable, they will not, subjectively, seem deterministic. People worry that not having free will means we're helpless passengers in robotic bodies, but that's dualism raising its ugly head again - our thinking selves are part and parcel of the deterministic process.
Even my philosophy prof. found it hard to grasp, suggesting that it would make sincere emotions like love meaningless so that hugging his mother would be an empty gesture. I had to try and convince him that was far too simplistic, that nature, nurture, and life experiences had made him the kind of person that finds giving and receiving emotional hugs with loved ones deeply satisfying and rewarding - and meaningful.
The sense that we have free will is much like our other biases and heuristics - a convenient and intuitive view of our interactions with the world, but being aware of, and accepting this, does provide a path to a more enlightened view of the behaviour of our fellow humans.
We can then see that, for example, seriously anti-social behaviour (violence, etc,) is a result of a life-long interplay between nature and nurture that, in a deterministic sense, the individual has no control over... The rational view is sympathy for their misfortune in becoming that kind of person. Punishment and/or retribution are not rational responses unless they are likely to reform the offender; they are emotional responses grounded in the free will heuristic. The rational solution is rehabilitation, if possible; if not, then humane separation from society.
We can also see that great the achievers have, in a deterministic sense, no more control over their path to success than the criminal over theirs; but because they represent goals or aspirations that we feel are beneficial to society, we can encourage those positive goals and aspirations in society by applauding them, so tilting the balance in receptive minds by the anticipation of positive reinforcement.
Some Scandinavian countries have moved a considerable way along this path, but it requires the acceptance (understanding, buy-in) of society as a whole, and it's hard to see how most other societies could even start to make that change.
Well, I would say that, wouldn't I?