Dreamcast discs don't "wear out". Seriously, WTF?
For a Sega system the DC is very unreliable. Also, I seem to have a vague memory of some of the more overproduced games like Crazy Tazi, and Jet Set being quasi-defective, and not playing in certain systems. I'd wager your system is dying and losing its ability to play less than perfectly pressed games like these.
I actually have a US launch DC with shitloads of hours on it. I cleared the Sakura Wars Complete Box 3 times, Skies of Arcadia, Shenmue 1 and 2, and logged insane hours with PSO, Sega GT, F355, Ikaruga, Mars Matrix, Test Drive LeMans, SFIII:TS, and more. At this point I actually wouldn't be pissed if it died because its earned its eternal rest, but it keeps going.
Just get another DC. They are so cheap, and so worth it. The DC was my dream come true for a game system. I so love that thing.
The controler though, no matter what anyone says, is a huge piece of f*cking shit. Furthermore, it seems even worse than the huge piece of f*cking shit that it is when you compare it to both the Saturn original pad, and analog pad, both of which are amazing. There is no excuse...none. The buttons are too few, too small. The d-pad is asymmetrical (WTF!?!), the analog's deadspot is almost half its range, and the position it forces your hands into for driving games is seriously painful. I use Saturn adaptors, fighting sticks, steering wheels...maracas...whatever I can, whenever possible.