Of the 2-1 loss, Warnock said: "I wouldn't have swapped too many players on the different sides today but we've lost the game.
"I know the style I want, we want to excite people, and I don't think we're far away from being a very good side."
After Joe Ralls had struck a post from 20 yards for Cardiff, Reading went in front in the 42nd minute when Garath McCleary's clever back-flick set up John Swift to score from close range.
Cardiff drew level in first-half stoppage time, when Ralls rifled in a spot-kick after Liam Moore had fouled former Reading defender Sean Morrison in the area.
But Reading clinched it on the hour to move back into third place in the Championship.
Sol Bamba fouled Yann Kermorgant on the edge of the Cardiff area and the Frenchman guided home a superb free-kick for his eighth goal of the season.
"We're very happy with every win," Reading manager Jaap Stam said. "It's very important to do that in the position we are in now.
"The teams around us are close so it's good to keep the momentum going and keep winning games.
"Cardiff kept us going until the end. We knew what their qualities were and how they played. We saw them a couple of times.
"They tried to stop us playing at the start by getting everyone compact and not giving us the space to get through.
"We didn't make the right choices always. We needed to move the ball more from side to side, to wear out Cardiff.
"Eventually, they would have got tired and you would have got your spaces and created chances.
"We gave Cardiff the opportunity to get forward a few times and that's when you make it hard for yourself. You don't want to do that."