I'd suggest you do set up your website, but you don't -- certainly not at this stage -- put up any of the book you're writing.
A website can act as a shop window for you and your work, especially if it incorporates a blog so that there is something fresh for people to see on a regular basis. If you can attract sizeable numbers to your site before you publish or seek an agent/publisher, then you'll have gone a long way to help in selling the novel. Certainly some 12 or so years ago when I was looking into the issue, it was standard practice to advise writers to set up a website asap, so that there was a readership all ready and waiting when the book was done.
If all you want is for your family and friends to see your work, then certainly one option is to post the novel on the website, either as you're writing it or when it's all written. In your post you speak of "long term traction" for the story. I'm not sure quite what you're intending by that, but if you're thinking of writing a series, posting the completed work on the website might be an option, in effect giving the first novel away in order to get readers who will want to buy the sequels.
However -- not wanting to rain on your parade, but simply being pragmatic -- if this is your first draft of your first novel, then unless you're a genius, that draft isn't likely to be any good; nor in all probability will your second or third draft. It's like expecting to be a perfect driver the first time you get into a car -- no matter how many times you've been driven and seen it done, it really isn't as easy as it looks. For that reason, it's best not to push the first -- or second or third -- draft into the world on the website or anywhere else, simply because it won't be the advertisment for your talent that you want it to be.
Once the novel is completed and with the help of your beta readers you're in the final stages of making it the best it can be, then is the time to consider whether to go for self-publishing or to try and attract an agent/publisher. As Jo says, there are advantages and disadvantages to both, and much will depend on why you are writing, what you expect from it, and how much effort you're prepared to put into it. But do be aware that the vast majority of people submitting to agents don't get picked up, many of those who do get agents don't actually get a publisher, and those who are published get a lot less than you might think. But on the other side of the coin, the vast majority of people self-publishing don't sell many books (fewer than 100 is a figure that comes to mind, though I'm not sure where I've picked that up or how accurate it is) and make even less money.
