DVI and HDMI are digital and will give better quality than VGA. You are good there.
The main reason hdmi has sound is so you can play sound through your monitor speakers if you have them.
Not useful since monitor speakers are crappy.
Look at the psu you have.
What is the wattage?
Does it have at least one 6 pin psu power cable available.
If it does not, the strongest card you can use will be a GTX1050ti.
If you want a stronger graphics card, look for the upcoming GTX1660ti.
It will be a low power card of improved performance.
Of cards available now, something in the GTX1060 class will be about right.
Here is a EVGA GTX1060SC for £229.99 which leaves you with a budget for a good psu.
https://www.amazon.co.uk/EVGA-GeFor...=UTF8&qid=1550675095&sr=1-3&keywords=gtx+1060
You only need 550w.
Here is a 550w Seasonic focus gold for £82.99
https://www.amazon.co.uk/d/Computer-Power-Supply-Components/Seasonic-SSR-650FX-FOCUS-Power-Supply/B073GY89G5/ref=sr_1_5?s=computers&ie=UTF8&qid=1550675635&sr=1-5&keywords=seasonic+focus+550&th=1
Do you need a better monitor??
That is really your call.
Larger monitors with higher resolution are more immersive.
Something in the 30" size.
For quality, pick a IPS 178/178 panel.
For fast action, tn is faster but a lower quality image.
Go to a store and see the differences in person.
Consider carefully, a monitor tends to be a long term purchase.
Bust your budget if you need to for a good one.
Lastly, if you have not yet done so, put windows on a good ssd with the rest of your budget.
I like Samsung EVO, they have a nice utility to move your C drive.