What does it mean if a pickup has higher or lower output?
A high-output pickup sends a stronger signal to the amp, which means the amp distorts more readily. Double-coil pickups originally had more output than single-coils, though nowadays there are many single-coils models that rival humbuckers in output.
Here's a real-life scenario: Say you plug a guitar with moderate-output single-coil pickups into an amp, and hear a clean sound no matter how hard you play. If you switched to a guitar with hotter (this is, higher output) humbuckers, you might hear a slightly dirty, distorted sound, even at the same amp settings. And if you used a guitar with super-hot pickups, you might hear distortion at all times. Or to put it another way, higher output means more distortion at any given amp setting.
But you can still get super-distorted sounds from moderate-output single-coils by dialing in a more distorted amp sound, or adding a distortion or booster pedal between the guitar and the amp. Think of Jimi Hendrix, who created extreme distortion and feedback with vintage single-coil pickups by playing through a fuzz box and turning his amps past the point of distortion.
On the other hand, you could get an ultra-clean sound from a high-output pickup by using an amp designed not to distort, such as a Roland Jazz Chorus® or a Polytone®, or by connecting your guitar to a mixing console without using an amp. (Both techniques are common among jazz players.) But generally speaking, players specializing in aggressive rock and metal are the most frequent users of high-output pickups.
You don't hear much about "low-output" pickups. There are some weak pickups out there, but for practical purposes, "moderate output" refers to the lower end of the output spectrum.
Is high output better than moderate output?
Sometimes, though it can be too much of a good thing for certain styles of music. Also, greater output often translates into darker tones, though some ingenious high-output pickup models are designed to counteract this tendency. For example, our Dimebucker and Duncan Distortion humbuckers have clear top end and tight bottom response thanks to carefully designed ceramic magnets.
You should probably try some guitars with moderate-output pickups and some with hotter pickups.