Kindleworks - student project

I really loved this class.  I followed along very closely so I have a logo that looks very similar to the teachers...

I had a LOT of trouble at the end selecting the letters and drop shadow in Photoshop so I could recolor it.  I was wondering if anyone could help me with the following:

1. Why can't I select with the magic wand. (i'm a photoshop user but it's not working in this case)

2. What is the best way to get this BACK INTO ILLUSTRATOR?  

Thanks for any advice anyone has!