Are more jewels (inside the watch) better?

Not necessarily. A typical hand-wind movement today will have only 17 jewels as a full complement. Some really high-grade or ultra-thin movements will add a few extra jewels to further protect against any wear, but even these top out at 21-23 jewels.
Only those pieces of the movement which are between the mainspring and the escape wheel are candidates for jeweling, as these are the movement parts that experience the large forces or relatively high speeds of the mainspring or escapement. Other components, such as the motion works (i.e. hour and minute wheels), calendar mechanisms, and winding train are not under this constant stress, and thus arguably do not need jewels.
Automatic winding movements will add about 4-8 jewels to help most efficiently transfer the relatively small rotor forces into winding the mainspring. Another factor has to do with how the watch is constructed - especially for chronograph movements and perpetual calendars. Some chronograph movements used today (including the ETA 2894-2) are modular in construction - meaning that a plate containing the chronograph works is grafted onto a basic timekeeping movement. Since the original timekeeping movements were not always designed with this in mind, it becomes critical for the add-on module to add as little "drag" as possible - which may indicate use of jewels for their low friction properties.
BTW, one will occasionally encounter a quartz movement with jewels in it - they technically aren't really necessary because a quartz wheel train is not constantly under stress.
As a historical note, there was a "jewel craze" about 50 years ago, where manufacturers, under the belief that the public thought more was always better, came up with 75 or even 100 jewel movements. Most of these jewels were not functional in any way, and the results looked ludicrous to an informed eye.