I'm starting to replace some wifi devices with zigbee too, Yes many zigbee devices will act as a repeater or router for other devices to connect through, the only devices that tend not to have this functionality are battery powered devices like pushbuttons or remotes.
Just a word of warning, those S26 Zigbee outlets have quite poor range so you might still run into issues if you only have a couple of them.
As far as I know there is no alternative firmware for the Zigbee and Z-wave devices. nor is there any real need for one as they do tend to "just work" but that also means you are stuck with the features and functions they give you. There are some Zigbee bridges that can run ESPhome to add some customisability, but that is just for the wifi side of the device.