If they take reprints, which few magazines seem to, then they should accept self-published stories, too. However, as you noted, most mags want first rights, which you've already used by self-publishing your stories. You're probably better off writing new stories if you want to submit them to literary magazines.
To answer your second question, there are advantages and disadvantages to traditional publishing (just like self-publishing). Also, some books are better suited to traditional publishing than others. I'm still seeking publication with a traditional house for one of my middle grade novels. The other two I'm planning to self-publish. I feel like the first two aren't "commercial" enough for traditional houses. The other (I like to think, anyway) has much more commercial appeal. Of course, I'll probably be disabused of that notion pretty quick when I start subbing it. But I'd like to at least try that avenue first for that book.
Hope that helps!
Rue
To answer your second question, there are advantages and disadvantages to traditional publishing (just like self-publishing). Also, some books are better suited to traditional publishing than others. I'm still seeking publication with a traditional house for one of my middle grade novels. The other two I'm planning to self-publish. I feel like the first two aren't "commercial" enough for traditional houses. The other (I like to think, anyway) has much more commercial appeal. Of course, I'll probably be disabused of that notion pretty quick when I start subbing it. But I'd like to at least try that avenue first for that book.
Hope that helps!
Rue