To say what jaaas said in another way, for a countable infinity, you can literally count them "1, 2, 3, 4..." even though you'll never finish.
For the real numbers, you can't count them. If you start with 1, can you tell me what the "next" real number is? If you say 1.001, I'll say 1.0005 is right between them. You can always find another number between number a and number b, so you can't ever count them in the same way. That's why the reals have a higher order of infinity than the natural numbers.
That's the only explanation I've ever been able to use to get anyone to really understand why one infinity can be bigger than another.
Your argument (in paragraph two in the quote) is incorrect, because the same argument would show that there are more rational numbers than natural numbers, because between any two rational numbers, there are infinitely many more rational numbers. However, there aren't more rational numbers than natural numbers, so the argument is incorrect.
The way to think about this in common-sense terms is to realize that when talking of infinities, the normal method of counting (which works well for finite numbers) does not make sense. The method that is used is instead is (conceptually) to try to pair the numbers up in some way. If there's a way to pair them all up with none left over, then they have the same cardinality. See this image for one way that the natural numbers can be paired up with the rationals. There is no way to do this between the natural numbers and the real numbers.
A paradox has the characteristic that it never stops. The moment you acknowledge version 1, version 2 becomes true and the moment you acknowledge version 2, version 1 becomes true.
It is the same here:
the moment you acknowledge that there are x numbers between 0 and 1, you have the same number of numbers between 4 and 5.
The moment you acknowledge the same number of numbers between 1 and infinity for each different unit, you have that same amount of numbers mirrored between 0 and 1.
This would be true, except for the fact that there are different lengths of infinity. For example, f(x)=2^x > f(y)=2y/10^800, x=y, for all positive values of X. This means that, for f(∞), although both f(x) and f(y) approach infinity, f(x) is larger. This is the underlying reason for why calculus works, if it were otherwise, x lim x →∞, (2x^2+1)/(x^2+1) would be undefined, not 2.
Sorry for the long, complicated explanation.