I have a cheap 3.5mm clip on microphone from amazon that is mouse quiet when plugged in directly to my sound card. I checked the levels and even used mic boost (then turned it off immediately). I've found that I get a lot of hiss and hum this way as well.
With music equipment, the general rule is buy the best you can afford. Otherwise you loose your savings in upgrading and or having sub standard equipment.
Read reviews and talk to people about what works well for them and why.
If your interface would be multi purpose then as Tetsujin said, It would reduce noise from soundcard. But if its just for this one purpose, upgrade your mic. You could even get a USB mic cutting the soundcard requirement (its inside the mic)
My general rule of thumb, if the mic has a 3.5mm jack its usually naff and wouldn't even sell at a junk yard sale.
No. The interface you suggested is designed to take a Line level signal (maybe the output of a small mixer) into the computer. This is not what you require. If your computer has a socket labelled "mic" it will be possible to obtain an inexpensive microphone that suits it, giving acceptable level (if only moderate quality). The sort of thing you might use for a Skype call. If you want musical quality, buy a mic that has an XLR connector and an an audio interface with an XLR socket. Be aware whether the mic requires phantom power and whether the interface provides it.
I suggest you test it on a USB interface/mini-mixer or even a proper mixing/PA desk before buying anything else. The microphone might just be inherently poor and you'd be wasting your money.
You haven't said what you want it for but for instance I have a USB Skype headset which works just fine although if you want to record high quality singing maybe not.
What is the intended usage?