It will help, it's not THE answer, but other than costing you a stop of flash output, it can't hurt. A piece of Tupperware, a square of toilet-tissue, or some translucent plastic packaging will all do a good job for a LOT less money.
Piece of white paper and some tape work in a pinch. Don't spend a lot if you buy one! Cheaper flashes that can be used off camera are less expensive than some some of the modifiers you can buy now a days. Many are well under $100, some for as low at $45. Or even on camera with just tilt and swivel functions make a big difference.
Yonguo seems to be a popular off brand flash now a days.
I'm not keen on commercial diffusers for a pop-up flash. I'll explain why.
BTW, What will _really_ help is an external flash.
The built-in pop-up flash is good for fill lighting for distances of around 10' (give or take). When you're using it as "fill" flash, you're trying to fill in shadows created by other light sources (usually that means the Sun). You'll still have shadows... but they'll be weaker shadows (not as intensely dark). The images look better because you don't have intensely dark shadows.
Photography is all about "light"... but to have good "light" you also need "shadow". If you don't have shadow then subjects appear flat. Shadows create that 3D dimensionality that clues in the eyes of the viewer that there are contours, texture, etc. on the subject (whether the subject is human or some inanimate object). The problem with the pop up flash is it's located on the camera body about as close to the lens as possible and that means you're not getting any off-axis light to create shadows -- now you have flat light with no dimensionality and no texture.
There are more problems with a flash diffuser on a pop-up flash. In the studio where flash systems are often completely manual, it's good to know how attaching any light modifier affects the flash output. I've done meter readings on the bare flash, then attached a frosted diffuser and done another meter reading (from the same position) and determined that the particular diffuser I was using was eating about 1 stop worth of light (one "stop" is the halving (or doubling) of the amount of light. It means that I would have to compensate by opening my aperture 1 extra "stop" to compensate... or tell the flash to double it's output power (assuming it can).
An external flash (and a trigger) would let you create shadows.... but a flash is a point-source of light. A point-source creates shadows with strongly defined edges (the transition from light to shadow is a strongly defined line). If instead of a pinpoint source of light, you had something as large as a lampshade that appears to glow... then the light doesn't come from just one point... the result is a gentle transition from light to shadow and a light which looks much better.
Creating soft light isn't about shooting through milky material... or a fabric... it's about ENLARGING the source of light. This is why photographers have tools like shoot-through umbrellas and soft-boxes. The pinpoint source of light shines into those light modifiers and the entire thing glows. These photographers are trying to make a BIG source of light.
You can create off-axis light with an on-camera flash by "bouncing" the light off a reflective surface. A white ceiling usually works well. The ceiling isn't polished like a mirror... so it creates a "scattering" surface instead of a "reflecting" surface. This causes light to bounce off in such a way that it scatters in all directions and... viola: soft light... with pleasing shadows! The bounce trick is about using the ceiling to create a large source of light that rains down from above (but this can create shadows in eye-sockets and the "raccoon eyes" effect if you aren't careful.)
This is a problem for on-camera pop-up flashes because they aren't particularly large or powerful. They're good enough for that 10' distance (crank up the ISO and they work for longer distances) but when you consider that the light would have to bounce off a surface to direct the light up to the ceiling and then scatter back down (and much of the light is absorbed by the ceiling ... you're not going to get anything remotely close to 100% reflectivity off a painted surface) and the pop-up flash just isn't strong enough to do the job. A pop-up flash isn't going to do well if you try to "bounce" it off a scattering surface to create soft light (there would probably be very few situations where it was adequate) -- so bouncing is probably not a realistic choice.
So back to the diffuser for the pop-up flash... if you throw a diffuser in front of a pop-up flash (remember... these things are not very powerful to begin with) you're going to cut the power output... probably in half (or more) and all to take a square surface area which is probably about 1/2" squared... to maybe 3 or 4 square inches (about the size that an external hot-shoe flash would be without the diffuser). And the problem with tis is... it's STILL going to be a tight light source that doesn't give off soft light. (it's not BIG) So that's not helping either.
What would an external flash cost?
If you buy Canon's external flash -- suppose you look at a Canon 430EX III-RT speedlite flash -- that's about $250. And while that works ON camera for the price (and it's powerful enough to bounce off a ceiling as long as the ceiling is white and not too high) you have no way to trigger it if it is OFF camera (which is where you really want it). For off-camera use, you need a flash trigger. That can either be ANOTHER 430EX III-RT flash (they talk to each other via radio) or Canon's radio trigger (the Canon ST-E3-RT) which is $285 (it'd be cheaper to buy another flash). So now you're at $500.
OR... you can look at 3rd party options. Yongnuo doesn't have Canon's build quality... so don't give it daily beatings when you use it... but these things are popular and they cost a fraction of the price of the brand-name flashes by Canon & Nikon. A high-end model Yongnuo flash is about $150 (give or take) and an entry-level basic flash is probably closer to $60. But for about $100 you can have a reasonably decent model with "dedicated" flash capability (meaning it knows how to work with the Canon E-TTL system). Flash triggers are also available at relatively inexpensive prices (around $70 for a pair)
I wasted a lot of money trying various bounce cards and diffusers ... that really didn't do nearly as much (some did practically nothing at all -- except eat my light). I tried the Harbor Digital stuff... I tried the Gary Fong stuff.
Ultimately I found I needed something big and the best product I've found to date is the Rogue Flashbender.
If I were trying to do this on a budget, I'd probably pick up a Yongnuo shoe-mounted flash (forget the external stuff for now) and if I wanted a diffuser, I'd get a Rogue Flashbender (in the "large" size - the panel is roughly 1 square foot). That's still not particularly soft but you can fire the flash so it's light bounces off a ceiling, but anything that would have gone backward (behind you) will be bounced forward toward the face of your subject (avoiding raccoon eyes)
Quality LIGHT is more impactful to photography than a quality camera or quality lens. Sometimes available light is working in a way that gives it a nice quality... and sometimes not. The problem with available light is that you don't get to control it. Anytime you can control the light it's better for you and your photos. The first step in that direction is to get a stronger flash and something that can ultimately be used off-camera (even if you don't buy the remote triggers on day 1 ... you can get them later as budgets allow... but now you're ultimately building a system that will hopefully grow and last you many years (even if you get a newer camera someday).