The factory radio actually isn't that bad... it actually puts out some power, but the speakers suck.
I would suggest you start with just a new pair of speakers; such as from
J&M Audio. You'll probably find that it sounds clearer at higher volume, and won't need an additional amp. I swapped the speakers on my Electra to the J&M ones, and it is clear as a bell cranked all the way up. Also, it's tough to go wrong for less than $150.
If you shop elsewhere for speakers, make sure they are 2ohm. Before they started using the Harmon Kardon radio in 2006, the speakers were 8ohm; put those on the new radio and it won't last too long.