Whether or not a new camera with a new lens will make a difference is dependent upon several things. I have never used a 18-200- although I know there are some who adore that lens- some will say tradeoffs- others- just love it the way it is.
First off, your 40D is probably best up to about 800 ISO.. Years back, 800 might have been enough- but in today's world- especially in homes with much poorer lighting than was typical 50 years ago- 800 is probably not enough anymore. A newer body might get you to taking pics where you would typically give up with the 40D...
The second thing is the phenomena of having new gear. To some, this is exciting to some- another reason to pull it out and use it.. Sometimes, newer gear has more functionality- and the lack of functionality also leads to decline in use... Also consider whether you want a larger body or a smaller body- same thing for lenses...
Personally, I hated the 18-55- mainly because of its limited range. Hated it with a passion. the best lens I got afterwards was not necessarily the much more expensive replacements but a lowly 18-135 IS.. Since then, I have replaced that with a 18-135 STM (T4i ) which is really sharp- a very nice kit lens.. To me, that one kit lens represents a nice walkabout range for a crop camera- good enough for about 90% of all pics I take.
If you do consider a body- you might want to consider downgrading to a Rebel (downgrade- figuratively ) such as a T4i- that has lots of modes- things that might interest you- like HDR, etc.. The other thing you should consider is whether or not the ergonomics of a larger body - like the 40D is getting in the way.. The 40D is a relatively larger body- and may not be as comfortable for you as you would like- so go to a local camera store and find out if you find other bodies more comfortable. As you don't have a lot of gear- you may want to also try out a Nikon or two- and see if they are more to your liking..
The OP camera is a 400D/Rebel XTi not a 40D. That makes the camera upgrade a bigger issue to consider for many of the reasons you mention, especially the use of higher ISO.

