In general, operating systems tend to work towards having "cache + memory used" equal the actual amount of physical memory. The more that is cached, the greater the likelihood that certain operations can be sped up.
In general having more RAM means that the operating system with the same work load is able to cache more things, which could potentially speed some operations up. It is not however an indicator that you "need" more RAM as such.
However, your screenshots does indicate that you're using 1.8 GB of swap. That could be an indicator that more RAM is necessary. Coupled with the fact that you experience a lag when switching apps - it does sound likely that more RAM could be helpful.
I would try using the Terminal and running the command
top. It will show a list of processes running on your Mac, and at the top it will list the number of "swapins" and "swapouts". If you have top running in a visible window, and then try switching between the apps that you use - then check if the those two numbers start rising when you experience the lag. If that's the case, I think a RAM upgrade would most probably improve the situation.