Yes that pinch bolt needs to be loosened slack pulled out and re-tightened...Here's how:
-Depending on the spring in your rear derailleur, shift to either the highest or lowest gear (whichever one makes the cable go slackest).
-Turn your barrel adjuster at the shifter 1/3 to 2/3 of the way out .
-Loosen the pinch bolt on the derailleur, pull all the slack out (make sure cable housings are fully seated in their stops), and re-tighten the pinch bolt.
-Use the barrel adjuster to fine tune any tension issues.
-Done

 

I done the above(no slack now) and the chain keeps popping/clicking on the rear sprocket. It doesn't look like it's trying to go up or down a sprocket, just kinds of pop on the same sprocket every couple of seconds, then goes back to normal.

 

I done the above(no slack now) and the chain keeps popping/clicking on the rear sprocket. It doesn't look like it's trying to go up or down a sprocket, just kinds of pop on the same sprocket every couple of seconds, then goes back to normal.

Re-visit the barrel adjuster. It's a fairly sensitive adjustment, and sometimes a half turn is enough to take it from perfect, to not so perfect.

If that fails, you may want to check for bent derailleur hanger, bent sprocket teeth, or bent chain links.

 

take it to your LBS and have them show you have to fix it. mine would do it for free but some might charge a small fee

 

try following this guide step by step
http://www.parktool.com/blog/repair-help/rear-derailler-adjustments-derailleur