You won't have any trouble reading floppies, and shouldn't have any problems with CDs. I copy stuff from my Win95/98 computers to my 386 (DOS and Win3.11) all the time. I'd guess that 99% of users don't bother to use FAT32 on floppies. You'd get very little benefit from reformatting them, so people just use them as is, which is FAT16. If you tried to hook up a FAT32 hard drive to your Win3.11 computer, you probably couldn't read it.
Win32s came out around the time Win95 went gold. If I remember correctly, FAT32 wasn't introduced to Win9x until OSR2, which means that it's very unlikely Win3.11 (even with Win32s) would know what the heck FAT32 is, let alone how to use it.
Let me know if I can be of any more help.