I agree you can do picking with a pick, or picking with your fingers, strumming with a pick or strumming with your fingers. The pick is going to give you a much brighter and harsher sound for the most part regardless of whether you use a soft-extra hard pick. If you like that sound, or you are used to the dexterity of picking with a pick, you can get some great sounds from that.
I use my fingers to pick and I just LOVE the Oasis nail file
http://oasishumidifiers.com/nail-shaper.html (to care for nails). I was turned on to these by the great uke pro Matt Dahlberg and once he showed me one, I was hooked.
The muffled sound is most likely the way your finger is brushing across the strings, assuming when you pick it's very bright and cleaner sounding? There are many ways to strum. Some do it at an angle, some directly up and down across the nail, etc. Experiment by taking your index finger and make a fist holding your index and thumb together where your index sticks out so your finger is a bit stiff. ( I think this is what Bao desrcibed). Then try to go across the strings at about about a 20 degree angle so your striking down with your nail. However, your going to eventually do what someone either shows you to do that works, or the way you have figured out to get your sound which could be six ways from Sunday ;-)
The other factor is the strings. Just because it sounds dull with your finger but brighter with a pick (It will always sound much brighter and harsher with a hard plectrum). Your strings might be part of the issue, but without knowing the strings, not sure on recommendations. Many ukes come with Aquila's that are usually pretty darn bright sounding. If you have those on your uke and it's dull sounding I would be curious.
I suggest watching a video
http://www.youtube.com/watch?v=Q_CmQEnSHpQ from Kimo Hussey on Right Hand technique as it's a really good video.
Don't get frustrated as you will find the way you like and it will all click.
Cheers!
Since you are new, you should try everything. My suggestion is to try growing the nails on 4 of your fingers, leaving out the pinky unless you are going to do some serious flamenco strumming. My thumb nail splits in one part so I have never been able to grow it long. This guy has suggestions:
http://liveukulele.com/gear/fingernail-care/
I carry a little piece of sandpaper, 600 to 1000 grit to try to keep my nails in shape. I constantly break my nails and can play without them but I prefer the tone with long nails. I would be more careful with them if I actually had to support my family with my uke or if I didn't have to do dishes, or work in the yard or do any kind of work for that matter.