"Your pen is better than mine."
Translation:Via skribilo estas pli bona ol mia.
Basically, "Mia" means my, "La mia" means mine.
It's not compulsory to make this distinction, but it is better style in my opinion.
I've seen the word "plibona" used here and there in the Esperanto world. Is that a correct use of word construction? Moreover, can it be used in this case? My instinct says no, as one should separate the words in order to make the "pli/ol" comparison clear, but I've still seen it often as one word.
I'd have to see "plibona" in a real context before I'd be ready to accept it as a real word. The right way to say "better" is "pli bona." Given that, what do you think "plibona" should mean?
It would mean "better", but as an alternate one-word spelling. In that way, it would be more like a compound word. I've also seen "plibonigi" as a verb meaning "to improve [something]". Sometimes it's hard to draw the line between what's acceptable and what's people just taking creative liberties. It's a pretty lenient language but that leniency can only go so far.
In that case, no. "Pli" is not a prefix in this way. There is a difference between "pliboniga" (improving) and "pli boniga" (better at making something good.)
Not exactly always... Sometimes the meaning will change (Tio estas korekta = This is correct; Tio korektas = this corrects), and sometimes it will sound a little poetic or emphatic.