I will agree with Audiofeil (I must be coming down with something - this is at least the second time this year) that spending $1000 on a used setup can get you a goosebump-inducing sound (though as others have said, it takes more to get all the way). Unlike the other parts of most people's source components, there is a significant physical aspect to turntables. That includes support. I will agree with Samhar's comments above, certainly in your system (turntable on top of 'wood' desk on hardwood floor), I would be fearful of environmental noise getting into the turntable. The first thing I would do in your case is get a suspension/isolation system which reduced the resonant frequency of environmental noise. This could be magnetic suspension, or something similar (Yamamoto makes little magnetic repulsion footers, I think Clearaudio may too, Sony used to; a Relaxa platform works too). I expect that would improve your result somewhat, and perhaps somewhat dramatically.
I will have to let others comment on your table/arm, cartridge, and phono stage as I don't know them. The table you have has a very small footprint, and if maintaining that footprint is important to you, the things you have to work with are probably suspension, cart, and phono (as I don't know if the arm is replaceable).
Dougdeacon's point about a $125 MM cart being wonderful BECAUSE the other two parts of the system (table/arm and phono stage) are up to snuff is key. One can say there are three parts to the system (and there are sometimes more, depending on how you set yours up) and if any one of them is not up to it, the whole will be dragged down to the level of that one. Personally, I find the cheapest ways to improve an existing setup are usually, in order of improvement/cost ratio, is 1) suspension/isolation, 2) a good protractor and good setup, and 3) a better phono stage. Oops, forgot to mention periodic use of Magic Eraser to clean the stylus (thanks Doug!).
I have one analog system in place where I "cheat" on the phono stage because it is in a preamp, but used the table, a cheap-ish vintage MM cart, plus half of the phono/pre cost me less than $1000. That said, it cost me a lot more money and time and learning to be able to put that together, and considerable luck on the used market (used, the table+arm+cart would be more than that on Audiogon if you could find them, and the preamp was not sold in large numbers and is relatively unknown, but an absolute gem in any case). Nevertheless, that system, even if it cost $2k, would be sufficient to get one very far in vinyl.
