From your description it really seems you have quite the passionate budgie boy.
Did you notice this change in behaviour only after Peanut's mate passed away or did he already show signs of being overly passionate?
It's very likely he developed this obsessive behaviour as consequence of losing his mate.
I have also dealt with my fair share of overly passionate male budgies and what I did with mine when I knew they were about to mate was to redirect their attention to something else, to give them extra out of cage time for them to play and fly so that their extra energy would be spent differently.
The last budgie who had this issue was my Carioca, by the time he was just shy of being 4 months old and he would obsessively mate with his food dish.
I used the method described above and over time I noticed an improve on his behaviour.
A few months later I got him mate and while he was very happy and excited to have a cage buddy, he behaved like a gentleman and all the unwanted matings were put to a stop.
You did very well in separating Blue from Peanut, and you do have an excellent plan for your budgies!
Your budgie boy is currently very excited at the prospect of a new friend and he is not being able to control his enthusiasm. Once Peanut realizes that Blue is there to stay and is not going anywhere, he will calm down and the more overwhelming advances towards Blue will end. Blue will also learn to fend for herself in order to avoid the more passionate advances.
Once quarantine time ends, you can place both cages close by, so that both budgies see and communicate with one another. Once you notice your boy is more calmed down, you can allow them to have very closely supervised out of cage time together.
If you happen to see more heated singing coming from Peanut, the intense head bobbing towards Blue, you can interrupt and divert Peanut's attention in order to "break the spell" of the courtship ritual and prevent him from trying to mate.
Good luck with everything!