I am currently using a blue Snowball microphone for most of my recording, although I mainly only use it to talk to other people. When recording stuff like guitars and vocals is it better to buy a microphone that is more meant for that as well as an audio interface which can be quite expensive, or is it better if I just continue using this blue snowball which seems to have been fine for me so far?
The Snowball isn't disasterously bad. But there's no point in swapping it for another 'dirt cheap' microphone. Your next step up might be the Samson CO1U (if you want to stick with a USB mic) or the CO1 plus an audio interface. THere are others to look at too at that price point.
But be aware that the price of competent audio gear keeps falling. And the difference in sound between 'competent' and 'top class' may be less than you imagine (or hope). More than ever 'It ain't about the gear'.
If you want to improve your sound quality in recordings then yes, you do need to get a dedicated microphone, and ideally get an audio interface.
The standard workhorse mic is the Shure SM58, both on tour and in studios. It's relatively cheap and incredibly robust, and can be used for vocals, acoustic instruments, mic'ing up speaker cabs and even drums - although there are microphones for each of these specific use cases that are better for that purpose, none are as good across everything.
But you may not need it. If you are happy with the sound you currently get, then stick with it unless you have a reason to upgrade.
"If it ain't broke, don't fix it."
Getting a better quality mic and an audio interface would certainly improve the sound quality of your recordings. But whether or not you need to improve the quality of your recordings is really up to you to decide. If your recordings are just for yourself and you're using them as a way to log your progress, or to critique your own playing, etc. then the mic you currently have is fine as long as you're happy with it.
However, if you are recording songs with the intention of releasing them to others like online or locally then you should strongly consider upgrading your recording equipment.