Should I burn fat or build muscle to get rid of my belly?

It feels like my center of gravity, it's so fatty and it sags and weighs me down. Everyone says I'm a good weight and yes, maybe but was super skinny my whole life and the past year I've gained weight pretty rapidly and I'm no longer comfortable with my body. The goal was 123, I had a hard time losing or gaining weight forever and it constantly fluxuated. When I reached 123 finally, I was so happy, then my grandma passed away and now I'm 136 since I started eating bad and not exercising and my stress has increased so much.

I'm smaller than I was at my biggest, I lost 2 pounds and lots of fat, gained some muscle.

I've been walking/jogging and doing some stomach exercises but I've mostly been focusing on cardio. Should I focus on building muscle? Cardio? Or should I be doing both? I'm trying to lose weight but also tone up.

I've also changed my eating habits a lot. I find my fat gathers on my thighs, belly, back, face and arms.

Any advice?

This was me around my biggest, you could really see it in my face.

I'm 5'3" and a half btw and at my smallest I was 103.