Always remember that Keywords are the SOUL to ones website.  Ensure that your keywords are relevant to what target the audience is searching for in all search engine tiers.

Dont be afraid to use long search phrases.  If you have a product or service that a consumer desires it should not lessen or decresase your captive audience traffic.

Keyword Density is a very important and a useful tool to measure the quality set of key terms.  Keyword density is vital since search engines channel the keyword information to categorize a site's theme, thus enabling the search engine to determine terms the site is relevant to.  With enough research one can maximize their placements by choosing the precise keyword for best optimization. This is a great Keyword density analyzer tool by SEOBOOK to check your website Keyword Density.  Check you site results here.

It's wise to choose terms that will bring well-targeted traffic to ones site when using a keyword(s) on a page.  It's also fine to use keyword phrases that share some of the same words.

When discussing keyword density in terms of search engine algorithims it boils down to where in a document the keyword terms occur.  Again it tells of the main theme, topic and sub-topics of the documents.  Remember, that most search engines treat hyphens (in hyphenated key phrases) as a space.  The following is a quick tip on ways how to properly use keyword selections. 

Do ---
Use key phrases "Pay Per Click", "PPC", "PPC Experts" "Search Engine Optimization", "SEO", "SEO Consultants", "SEO Specialist" Etc.....

Don't --- 
Use generic terms like Plane, Cars, Music, Radio, Fridge Etc....
Avoid words that have different meanings that elevates the estimated traffic and competition levels.
Stay away from using internal Corporate catch phrases. Ex. Walmart "Save money, live better" The Home Depot "You can do it, we can help" CVS/Pharmacy "For all the ways you care" Etc....

If done correctly, Geo Targeting could increase a websites traffic tremendously.  For Example.  If you own a local carpet cleaning company in Phoenix Arizona it's highly recommended to use key-phrases such as "Pheonix carpet cleaners" instead of using simple words such as "Carpet Cleaning Company".  You will usually notice higher monthly searches via Geo targeting because of specific intent to proximity of Business to Consumer or Business to Business transaction.  Most importantly you capture the attention of the search engine users intention immediatley seeing that your local.

If your using Alexa Rankings to gauge your traffic here are a few things you should know prior to relying soley on one source.  Alexa dosn't get much direct traffic and has a limited reach with it's tool bar.  Evidently, they are biased towards webmaster traffic. Read more "Alexa bias exposed by top google engineers"
written by Loren Baker of Search Engine Journals.  Another good posting regarding Alexa skews is Matt Cutts "Estimating webmaster skews in Alexa metrics"  The articles go on to state how a small change in a site visitor count can represent a huge change in Alexa rankings.