interpolate or lower res?

It's an essential difference that is often confused, sometimes even in the photographic press.

The image is made up of pixels and one of its properties is how many pixels per inch that it is made up of. 72ppi is fine for monitor display. 300ppi for an image that is to be printed.

Printers lay down dots of ink and how many they deliver per inch is represented as dots per inch. Let's take our 300 pixels per inch image. If we printed it at 300 dots per inch, that would be one dot of ink per pixel, not a recipe for a great print.

So we need as many dots as possible to make up each pixel and I always use the maximum, 2880dpi in the case of my printer.

It's not really very helpful to confuse the two things as it doesn't help us to understand what is going on.

So how many ppi does an image need to be best quality to the eye? It depends on viewing distance and print size and the Image>Image Size box will show you how they inter-relate. Basically a 72ppi image would look sharp, but only if viewed from an immense distance. If that was a poster 100 feet away that might be fine. For normal viewing the eye can see the difference up to about 300ppi, anything more is pretty much a waste and certaily I've never met anyone who can tell the difference between a 300 and 600ppi image.

Go the other way and a 150ppi image is clearly worse than a 300ppi one.