No crema? Your problem is using stale preground. The machine you have should be capable of some really good espresso...you should just expect wet pucks and portafilter sneeze...I dont think that Gaggia model has a 3 way solenoid valve to release the excess pressure after the shot has been pulled.
Clearly the best way to rectify this problem is to buy a burr grinder...not just any grinder...whilst you may be able to get away with a $200 sunbeam conical burr grinder, I have found its adjustment steps are too large to dial in an espresso shot. The minimum most people seem to recommend here in terms of grinders is the Iberital Challenge. I have had no experience with this grinder, but have used Iberital commercial sized grinders.
With regards to tampers, theyre a very personal thing. If youre only pulling one or two shots a day, they way it feels in your doesnt really matter...so Id go a Pullman. If youre on a budget, other tampers stainless steel tampers can be had for around $30