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Yes GC games already work in the Wii.  This is what will make downloadable GC games so easy for Nintendo to implement.

Nintendo no longer makes Wavebirds.  The GC Classic Controller I mentioned would get around this.  And the cord on the orignal GC controller is way too short.  Not needing a memory card to play GC games would be another advantage.

Downloadable games are simply more convenient than discs.  No need to swap discs.  Just pick what you want to play from a menu.  Switch from one game to another in much less time (maybe I'm just lazy).  Also, never need to worry about scratched/broken discs.  Plus they can be easily purchased at any time, no need to track down a copy.