When I played Yoshi's Island, I figured that Mario is only a few moments older than Luigi.
As to how old they are currently, I kind of place them in their early to mid 30's.
Oh, and the fire does come from their hands, or fingers. In Smash Bros. and NSMB, they throw fireballs out of their hands, while in the early cartoons, they shoot the fireballs out of their fingers.