+1 to this suggestion.
Or sell the bike and start anew.

Here's why:

The bike has a very short headtube, hence a short steerer tube. Any threaded quill stem can go no lower into the steerer tube than 80 mm from its bottom, the reason being that the steerer tube is tapered in its lower portion and the taper usually ends @ 80 mm. Attempts to reliably tighten a quill stem while its lowest portion is inside the tapered part of the steerer tube will result in misery and failure.

Your quill stem looks like it is of a 140-145 mm total height. If you are to raise the handlebar, you'd need to go to the next size up, which is 180-185 mm. Following the above paragraph, it is likely it would place the handlebars way too high, and you would be able only to raise them from that position (limited by the min. insertion line), while subtle lowering would be out of the question due to stem's bottom hitting the taper.

If you still want to use quill stems with your next bike, make sure it has a decent headtube length.