What sounds best: Vinyl or CDs

noise such as pops, clicks, etc. is present in vinyl and worse in lower quality vinyl

... and a vinyl recording will get worse as you play it over & over

digital is not subject to those problems

You’re supposed to listen through the pops and clicks. Besides CDs are SO compressed now who really cares? Tape is a natural medium. It breathes.

IMO, it all depends on the recording and on the playback equipment. Since you are just getting started, I would start investing in equipment that would really give your system a boost in SQ. IMO, going from a Yamaha CD player to a rega isn't going to get you ahead. I would invest in a really good quality external dac then hook up a CD player, music server/streamer to it. As for vinyl, get your wallet out. You will need a good phono preamp (much better than using 1 inside a receiver/integrated amp), then a good tt/arm/and cartridge. You see all these reviews comparing vinyl to digital and the reviewer always prefer vinyl. But when you look at their analog equipment, they can have up to $250k in a tt/arm/cartridge/phono preamp, and they compare this setup to a $15k digital setup. It takes quite a bit of $$$$ to build a good analog playback system, much more than building a really good digital system. I propably have 3x more invested in my analog setup (retail prices) compared to my digital equipment and I have vinyl albums that blow away my digital albums and I have cds/dsd albums that sound much better than vinyl. 
1 option when you go analog, you can setup a 2nd arm with a mono cartridge and get superior sound over its equivalent stereo album, if the album was produced originally as mono, not converted, for example, miles Davis kind of blue and the Beatles mono collection.

I’d like to offer my two cents as well. I own an Avid Diva II SP TT with an Audio Technica AT ART-9 MC cart mounted to an SME 309 tonearm setting on a 3" thick maple base with sorbothane feet. I use a Simaudio Moon Neo 310LP phono preamp for the setup. I also own a Bryston BCD-3 CD player. Both pass through a Parasound JC 2 BP preamp and Parasound A21 amp. My speakers are Focal 1028 BEs. In the world of analog, my TT setup is maybe 2.5 stars, my digital is perhaps 4 out of 5 stars. With that out of the way, I’ll say that my low end analog at three times the cost of my CD player does produce better sounding music. My statement strongly depends on the quality of the mastering of the media. The cleanest,most precise vinyl will edge out the very best of my CD collection, by a little bit. The point is, an analog setup will win a shootout with a digital setup most of the time, but there’s a steep price to pay for equipment and proper setup. You could definitely get more out your system with a better cart and preamp that won’t break the bank. A move up the Ortofon MM line to the 2M Black would be an enormous improvement from where you are at. It is probably the best "all purpose" cart I’ve ever owned. The 2M Red to the 2M Black is an honest night to day change  Attach a SEPARATE phono preamp (Graham Slee makes decent stuff that’s MM only) and you’ll have something that will almost certainly put a smile on your face when playing well recorded vinyl.

It all depends on the system(s) you are using and the quality of the recording. Overall, a record should not sound "much worse" than a CD or digital file. In my current set-up I prefer vinyl over CD or SACD. I am sure this is due to the equipment used. I use a Marantz UD7007 for CD and SACD playback and a Denon DP59L with ZYX Fuji cart for Vinyl. In my set-up vinyl often sounds better, but again, it also depends on the recording. To compare, the Marantz is a 700USD device for playback and the Denon / ZYX combo is over 3000USD. I find vinyl more dynamic, alive, and with a better sound stage than CD or SACD in my set. As mentioned in several other posts it is crucial to have your arm and cart set-up properly and have the right cart / arm combo. Best to use a table specific / cart specific protractor for this, or alternatively use a generic protractor. Also, if you should have some budget to up your cart I think it would be worth the effort. Hope this helps in your search for better vinyl playback.