Most people fall to the BS of digital camera salesmen. They outright lie to the customers when they sell the cameras.
A digital camera is no different from a regular camera in that it needs high quality optics to take good pictures. It doesn't matter if you have 30 megapixels if your lense is the size of a needle. Then again with 6 megapixels you can take pro class shots if you wield a $1500 lense on your camera.
The first picture was taken with maximum zoom -> lense was not powerful enough to bring enough light on the cell -> image became noisy. Add to the problem camera shake on high zoom -> camera probably uses digital camera shake correction -> resolution decreases dramatically. The less light comes on the chip the more noise you will have in the image. And that is without taking other typical lense problems in account.
Second big problem with digital cameras is that for cost saving reasons the chip that captures the image is actually much smaller than the opening of the camera. To acommodate that there's an extra lens that works like a reverse magnifying lense which stuffs the image on the chip. This creates an another layer of image degradation.
The cheapest camera available that can take pictures using a full opening size chip is the Canon 5D. Prices start from $2000 add another $1500 for basic optics.
So, you shouldn't be wondering why your 12Mpix camera takes crappy pictures. You should be wondering how you bought the salesline of supposedly high quality from a $200 digital camera.
And don't take me wrong I'm not blaming you - sales people ride the pixels in the marketing. Good news is that if you have a digital system camera, you can upgrade the optics just like any other camera to get some better quality pictures.
