@zmoney -
Hey Rob, you have a pretty good grasp of everything, but there's a couple things worth pointing out.
There could be 10 competing sites all together, but if they are all 16+ year old domains with PR7 lol you aint gettin nothing.
This is somewhat true, but only if those sites are intentionally optimized for those keywords. The SE try to index for just about everything, so there are many terms a site isn't optimized for that they will still get indexed for. A lot of aged and high PR sites will turn up in the top 10 for many terms they haven't actively targeted for at all.
That's why it's important to look at all those other factors you mentioned as well, keywords in content, title, url, backlinks, etc. If a 16yo site has been targeting keyword1, keyword2, and keyword3, and it's built up a high PR based on thousands of backlinks anchored with those keywords, then you find it's also ranking for some random keyword6 that you want to target then there's no reason to worry about trying to outrank them with your 2 month old PR0 website.
The point is don't let the aged and high PR sites scare you away from a profitable keyword unless the rest of your analysis indicates they're intentionally competing for that term directly.
Find out the quality and quantity of your competitors pages for that keyword. Get more and better ones and your good to go. This can take MONTHS. Don't be expecting to put a 850 word list into MS and sort by keywords getting less than 30k exact matches and slapping up something and doing some social bookmarking. And get down because the keyword isn't ranking in 1 week.
This is the most important point that you made. Evaluate the competition and then make realistic projections.
SEO is an ongoing process. If you get a page ranked fast, then good job. If it takes a bit longer for some terms though, that's fine to. Ideally anyone really wanting to make it with a website should be selecting a variety of keywords to target.
Try to find some low comp terms so you can get some initial traffic (and even some validation that you're accomplishing something), but also target some medium competition and even harder terms as well. The harder terms will take longer to rank, (and some of them may never get there), but when they do it can make a dramatic difference in how profitable your website becomes.
BTW, how old is the domain? Anything under 8 months to a year - well, you are def kinda screwed a bit...
As I said above, how true that statement is depends on what the intentional competition is for a keyword. Find the right keywords and even a 2 week old site can outrank a high PR site. It just depends whether that high PR site is actually trying to rank or not.
So, these pages that aren't "ranking".. How many backlinks did you give them? How old is the domain? How long has the page been indexed?
You've got to answer these, before you tailor your keyword selection methods. Because there's a strong chance you will be looking for keywords where you can rank right out of the box, and then completely screwing yourself on profitable keywords.
Those are words of wisdom right there. As I said above, look for easy keywords if you can find them, but at the same time don't be afraid to work for harder terms as well. In the long run your site will have a much better chance of success.
Like 5% of the keyword research is looking for the keyword. The other 95 is analyzing the optimization/backlinks.
Are you throwing backlinks with the exact anchor text at that specific page?
The whole point is. It's not your keyword research thats the problem
That sums it all up pretty good there.