Sent from my 486 IBM WIN 3.1x Desktop...
To answer the question, basically you're getting the loudest sound you can get with this amp and this speaker. Adding a transistor gain stage will only overdrive your guitar signal.
What you can try:
1. try another speaker. Even the LM386 provides just 1/2W, the speaker's sensitivity makes some difference. I use a 386-based amp connected to a 5" speaker as a "test amp", and when I connect the same 386 amp to a 4x12, the output sound is louder. More speaker's sensitivity = more mass of air in movement = more volume.
2. try another amp. Since you're using a 5W speaker, you can try amps up to about 4W.
I used TDA2005 before, but the 7805 chip was easy to burn during the process. Also it makes a terrible noise.
Why did you used an 7805? It's a 5V regulator, and the TDA2005 requires a minimum of 8V, it won't work with 5V.