Traditional brokerage funds are your only option if your goal is to invest in stocks/bonds, etc.
First off, I'm not a tax adviser, so don't take this as official tax advice. Just a few notes from my knowledge on your questions.
1. You are taxed on any capital gains when you sell stocks or bonds. The taxes are calculated as your sale price minus your cost basis (generally what you bought the shares at). So if you buy a stock for $100 and sell it for $120, you are taxed on $20. Most importantly, the tax rate you pay depends on how long you've held the shares. If you sell in less than a year, any gains are taxed at your normal income tax rate. If you sell after a year, you pay the long term capital gains rate (typically 15%, but it can be 0% or 20% depending on your tax bracket). Most people are best served by re-balancing after holding for more than a year.
2. Dividends are taxed, even if they are reinvested. However, the taxes are really immaterial until your portfolio gets sizable. While there are plenty of exceptions, most people will pay a 15% rate on dividends. If you have $1,000 invested, yielding 2% ($20), your tax bill at the end of the year will be $3.
Personally, I think it's good to hold some investments outside tax advantaged accounts. While the excellent tax advantages of 401k/IRA's are indisputable, having money outside of these accounts opens up options. For example, if you ever want to buy an investment property, or retire early without dealing with complex conversion/ROTH rules, having a free and clear investment account gives you options.
