Yes 16 vs. 24 bit is about resolution, and the amount of information recorded about each sound. IIRC, 16/44.1 is about 65,000 samples, while 24/96 is over 2 million samples. One difference is that you can record in 24 bit, at lower levels, without compromising the sound quality when you raise the levels in post. In 16/44.1, it was somewhat like the analog days, where you wanted to run as hot as possible, to avoid unnecessary noise. In the 24 bit world, a lot of people will run at -6db peaks, some as low as -12db, because raising the levels in post does not introduce the noise that was there in 16 bit. So if you are running in 24 bit, you can set your levels lower, avoiding potential clipping issues, and then add gain in post.
As for mic vs. line in, some mics need the little bit of power provided by the mic in jack. Others don't. You can test it out at home first. Also depends on how loud the music is. A future preamp will definitely improve the overall system, but then so will a future ( fill in the blank) and a (fill in the blank) and a (fill in the blank). The slipperly slope of becoming a taper/gear slut. +T for finding your way here.