Optimizing my backlinks, how?

Right now I'm getting about 1000 unique visitors daily on my website. I have some keywords that I'm ranking decent for but nothing exceptional (3-5 SERP). How do I push those up to #1 without being penalized by google?

At the moment the website is built up like this:
Money Site
Tier1 (Squidoo, link-exchanges, Pininterest etc)

I was thinking of getting some quality backlinks but where should I point them at? At my tier1 or money website? Should I get some tier2 links pointing at my tier1 and what's the point in getting up in tier?

More pages of original content never goes amiss and often picks up viral backlinks

I'm running a gaming fansite focusing on 1 specific game. I've gotten a few decent backlinks from others by having original content but right now I'm looking to push up my main KWs (the ones driving traffic) to #1.