Your bearings are loose and you could have lost some balls as well. Take to a bike shop ASAP. If the axle is bent which is also likely and the runs and cones are pitted, which is more than likely, then you will need a new wheel. A new wheel could be $30-90.
You could be going crosschained or the cable needs a bit adjusting. That is normal as the cable stretches and will stretch for several weeks until it settles.
If you have 3 rings on the front, you should be abler to ride all the gears on the back from that one or maybe all except the two extremes.