From this, it's quite obvious to infer that physical goods are more useful than digital goods, it's not even a contest.
It depends on the digital good. In order to make essential necessities to anywhere near scale of our needs requires automation. So these digital goods are an essential precursor to our physical necessities. Maybe they don't need to be produced on the scale of physical goods but every essential industry such as food, water, medicine, and shelter depends on so-called digital goods.
it's not. You are defining "more useful" using your own personal viewpoint. The truth about what is useful can only be determined by the buyer (paying money).
Entertainment is just as important to keeping society running as physical essentials.
First of all, there exists physical entertainment. For example, my family loves to play cards after a big family dinner.
Second of all, it's just not as important. Lack of entertainment will cause a society to break down over time, while a lack of food will destroy society overnight.