The El Mariachi audio technique was specifically, film the scene, then ADR the scene wild on set with a marantz casette tape recorder and a relatively cheap microphone from 6"-1' away from the actor. Then while editing, he hand synched the dialog to the picture, with cutaways and edits to cover any badly synched lip movement.
His audio SUCKED! before they spent all the money to fix it for him.... by hiring people like Alcove and APE to work on it for a few months with all their fancy gear.
That Zoom will get you good audio. I wouldn't bother selling it. I'd work on finding someone that will swing boom for you on EVERY SINGLE SHOOT you do. That way, they can get the time in to learn that craft. The Zoom resets its levels every time you turn it off, so be aware that you'll need to readjust them every time.
Get a decent shotgun mic (decent starts around $250). I recently upgraded to an AT875R and love it. It requires phantom power form the zoom, but sounds great.
The microphone quality and the technique will be a much more noticeable upgrade to your sound capture environment than replacing the recorder at this stage and budget level. Below the $500 mark for recorders, you'll get lots of hiss from the cheap electronics that keep the price in the budget range -- anything under that price point will have the same problems and frustrate you. We compensate for the cheap preamp noise by framing your shot a little tighter so you can get the microphone a little closer to get a better signal to noise ratio in your capture.
The inverse square law works here just as well as it does in lighting and cinematography. half the distance = 4 x the volume!