Should I have folded anywhere in this hand? NL5

[Jailblazers]

PokerStars No-Limit Hold'em, $0.05 BB (5 handed) Poker Stars Converter Tool from FlopTurnRiver.com (Format: 2+2 Forums)

Button ($5.52)
SB ($5.43)
Hero ($16.97)
UTG ($10.60)
MP ($2.60)

Preflop: Hero is BB with 6[img]/images/graemlins/club.gif[/img], 9[img]/images/graemlins/spade.gif[/img].
<font color="#666666">1 fold</font>, MP calls $0.05, <font color="#666666">1 fold</font>, <font color="#CC3333">SB raises to $0.1</font>, Hero calls $0.05, MP calls $0.05.

Flop: ($0.30) 7[img]/images/graemlins/club.gif[/img], 3[img]/images/graemlins/club.gif[/img], 9[img]/images/graemlins/diamond.gif[/img] <font color="#0000FF">(3 players)</font>
<font color="#CC3333">SB bets $0.2</font>, Hero calls $0.20, MP folds.

Turn: ($0.70) 8[img]/images/graemlins/heart.gif[/img] <font color="#0000FF">(2 players)</font>
<font color="#CC3333">SB bets $0.25</font>, Hero calls $0.25.

River: ($1.20) K[img]/images/graemlins/diamond.gif[/img] <font color="#0000FF">(2 players)</font>
<font color="#CC3333">SB bets $0.35</font>, Hero calls $0.35.

Final Pot: $1.90

No reads on villain.

I'm also wondering if I should've raised the flop or not. I didn't really think so because I'm basically only getting called in those spots by better hands, even though his hand looks like a C-bet, why not let him bluff one more street?

Another general question: Do you all advocate playing very passive in some pots when you know you are beating some of villain's betting down range? Or should you just find out where you are and take down the pot then.