Hiya, TheBroken, and welcome to the forums!
I'm a writer. There is soooooo much to explain re: new writer stuff. One of the best, most accurate, and most concise resources I'd recommend is the
resource center of SFWA (the Science Fiction and Fantasy Writers of America, which is the major trade association for SFF authors). Pay special attention to the first three links, since those'll contain loads of info for people just dipping in a toe to the world of pro writing for fun and profit.
Question One: What do other authors do when mid-stream? Do they form writing groups, or post blog posts with chapter outlines, or write tangent short stories in the same universe to gauge interest? Do people write stories as mini-series posts, or just sit down and Write The Damn Book?
Write LOTS, and be prepared for it largely to be terrible, and perhaps unsalvageable at first. It's like learning to play the saxophone--you have to go get through those hours and weeks of squawking before it starts to sound like jazz to everyone else. Thanks to my forays into NaNoWriMo, I trunked hundreds of thousands of words before I sold my first story. But those were my Rocky training montage, so I don't regret it at all.
And yes, it's helpful to find someone to read your stuff, preferably someone who's willing to give you blunt, honest, helpful feedback. Also: practice the art of receiving honest feedback and learning to use it, because that can be really difficult at first. Treat your crit buddies well, because they're offering you a gift.
I haven't really go a clue what today's publishing model is, and whether trying to make money out of writing is a waste of time or not. There's always the option of just posting content to a blog, or a forum, or whatever without charging anything at all. It looks like there are still indy publishers, and more traditional publishers, and magazines, and podcasts who all might pay directly (up-front or royalty) for content. On the other hand, there's the option of just creating a blog for the story, revealing the content over time, and making any money from ads and deals.
Pro SFF writing does pay. The rule of thumb is
Yog's Law: money flows *toward* the author. Even complete beginners should expect to get paid for their work. I advise avoiding nonpaying zines and markets until you've worked your way through everyone else who pays first.
Also, there's a difference between "copyright" and "First Rights". Copyright is the thing that means your story is your intellectual property. But zines actually pay you to license your story under a series of different types of rights. The most valuable is "First Rights", which is the right to be the first place in the world your story appears. Once First Rights have been exercised, you don't get them back, and from that point forward, you can only sell Reprint Rights (which still pay, but a lot less). So here's the thing: if you publish your story on your own blog, that constitutes exercising First Rights. Even if you take the story down again, the very fact it appeared there means you can no longer sell First Rights. So if you go the blog option, just keep that in mind.
Now for short stories, "pro rate" pay is considered $.06/word for First Rights. A few markets pay more, but are therefore more competitive. A lot of markets pay less, and are of various qualities (some are excellent, and some I personally wouldn't do business with). If you think you can make more in self-publishing or ad revenue, then it might be worth losing First Rights to pub on your blog (or wherever). I don't have any experience with that, since all my sales have come through traditional routes.
As for whether this is profitable, refer back to $.06/word. Even if you have a great year, you're probably looking at a couple thousand dollars pre-tax, which isn't a lot considering the effort. I do it mainly for the fun and the love, although the pocket change is certainly nice. I hear novel-writing is a bit more lucrative, but I'm not a novelist, so I can't speak to that.
Question Two: WTF? I don't understand ANYTHING about actually publishing things. Everything I've ever read on the topic just leads me to more questions like "Yeah. So what does that actually mean for what I should do about it?"
For short stories, do this:
1. Write the story.
2. Get people to critique it.
3. Revise it until you've polished it to a bright glow.
3b. Put your finished manuscript into
Standard Manuscript Format.
4. Open a free account with the
Submissions Grinder, and use it to match your story to markets based on genre and length.
5.
Submit from "top to bottom" - start with pro-paying markets, then semipro, then token. (For the most part, you'll submit to one market at a time, and wait until you get a response before moving to the next one.)
5b. Make sure your cover letter is bland and to the point -
this is a great model to use. And yes, it really, REALLY should be that bland. A lot of newbies worry about not having publication credentials to list in their cover letters, but I can tell you as someone who's on the other side of the table, we really don't mind or hold it against you. Brief is the way to go.
6. While you're waiting to hear back, start writing your next story.
7. When you get a rejection (emphasis on the "when"--even if you're Tim Pratt or Ken Liu, you will get A LOT of rejections), go to the next market on your list and resubmit your story.
8. Keep writing in the meantime, revising, and adding them to your submission queue.
9. Persevere. It's really common for it to take a few years from the time you start writing and subbing in earnest, and when your first sale happens.
10. When you get your first acceptance, loudly brag about it to anyone who will listen, because it's the best feeling in the world.