The key to answering this is to realise that approximating the identity is a special case: any $C^*$-algebra has an approximate identity!
Indeed, consider first $A = \overline{\mathfrak{m}_0}$ the norm closure, which is a $C^*$-algebra $\sigma$-strongly in $\mathcal M$. Then $A$ has an increasing net of positive elements forming a bai (indeed, the positive elements in the unit ball of $A$ form such a thing) see Takesaki I, Chapter 1, Theorem 7.4. This net converges $\sigma$-strongly to $1$ in $\mathcal M$.
Given $a\in A^+$ and $\epsilon>0$ there is $m\in\mathfrak m_0$ with $\|m-a^{1/2}\| < \epsilon$. Then $\|m^*m - a\| = \| (m-a^{1/2})^*m + a^{1/2}(m - a^{1/2}) \| < \epsilon (\|m\| + \|a^{1/2}\|)$ and so we have well-approximated $a$ by some element of $\mathfrak{m}_0^+$. It is hence possible to find a bai in $\mathfrak{m}_0^+$, but this may not be increasing.
I had originally claimed that $\{ m\in \mathfrak{m}_0^+ : \|m\|< 1 \}$, with the natural order, forms an approximate identity for $A$. However, it is not obvious (to me) that this set is upward directed (and so it seems to not necessarily be a net). So this currently remains a partial answer.