I guess it would be better for you to start with a low to medium competition keywords, while you get a better idea of the methods and also test different suppliers as while each are better in some ways they don't necessarily work for all the situations
There is only one winner here and you know who it is ... regardless of whatever we submit they almost always sides with the buyer. Personally i don't see any point in fighting it with them unless there is a risk to the account itself.
Sounds like a decent domain, as mentioned above focusing on long tail, real article marketing with quality link package (trickling and not a burst) should help to recover.
Good points, a key challenge in doing offline work is earning the trust of the local clients. One of the ways of doing it have a 1 or 2 websites (your own which you could rent or forward leads) ranking for a business type for a specific area (eg. don't go for London, but go for chelsea within...
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