What's the difference between "It could be better" and "It would be better"?

The key to understanding your question is could versus would.

Could means a possibility.

Would means certainty or intent.

The weather could be better or worse tomorrow. Both better and worse are possibilities for tomorrow. The weather might also be the same or nearly the same.

This course would be better if the teacher came to class better prepared. If the teacher came to class better prepared, then the class would be more productive.

It could be better. (Maybe, maybe not.)

It would be better. (If something happened to make it better.)

I hope this helps.