The simplest route is to get yourself a Volvo model 815 or 816 CD radio, which looks just like yours except it has a single CD slot at the top, above the cassette slot. These slip in with no tools at all, just pop out the two pull-out handles on the lower right and left sides of your present face plate, slide out and slide new one in with the same wiring harness pluged back in. They are 4 x 25 watt systems and sound opretty good for all-around use.
Alternatively, or in additon to above, you can add a 6 disk changer in trunk or glove box that also plugs right into the original radio (probably a series 811) or into the new 815/816. All of these can control the Volvo changer from the existing face plate controls, and your car may even be pre-wired with the control cable to the rear changer location. An upgrade to the stock speakers would be my next addition. Note that the 815/816 radios came with either a black face or a medium gray face, and little other difference between them. The 816 has automatic sound level control tied to the car's speed, but I don't know any other differences between 815's and 816's. Both radios and Volvo factory CD changers are usually on eBay. Note that the black face versions seem to be more rare and bring higher prices. Be sure it comes with anti-theft code, or at least the VIN for donor vehicle so you can get code from Volvo. I'll leave it to others to give you advice on non-factory alternatives.

Mike
--
Mike Sullivan ('91 745 (171k), '93 965 (147k), '95 855T (60k), '98 V70XC (78k)