What are good sources and textbooks covering the theory and models behind algorithmic trading and strategies?
Having traded algorithmically for a couple of decades and taught on the subject, I'm going to recommend four books: one practical, two theoretical (but important), and one that is light -- a "beach read" that still touches on many important topics.
The practical book is Barry Johnson's Algorithmic Trading & DMA. It is self-published and superb.
The theoretical books are very good at helping you look at algorithmic trading problems with a proper perspective. The two books I would suggest are Joel Hasbrouck's Empirical Market Microstructure and Market Liquidity: Theory, Evidence, and Policy by Thierry Foucault, Marco Pagano, and Alisa Röell.
Finally: the beach read. Go grab a copy of Lefèvre's Reminiscences of a Stock Operator. Many modern issues surrounding liquidity, order splitting, off-exchange trading and more are referenced in some way there. Prescient for a book written in 1923.