"The blue suit is a little better, that's why I bought it."
Translation:Синий костюм немного лучше, поэтому я и купил его.
Correct me if I am wrong, but prefixing "по-" to an adverb/adjective makes it "a little" something right? E.g. for this sentence I wrote "Синий костюм получше, поэтому я купил его". But now I am writing this, the sentence seem a little bit off to me/not exactly correct. I mean, I don't think I've heard people use the prefix this way. Can somebody clarify when it is grammatically permissible to use this prefix?
You can't separate "и" and "купил", otherwise the meaning would change. Your suggestion would mean "that's why I bought it too [in adition to some other purchase I made]".
It this case "и" must be directly attached to the word it affects. For example if you say "поэтому и я его купил" would mean "that's why I, too, bought it"