Google likes to see a reasonable CTR since it costs them money to show each ad. Also, since you only get paid by the click, you're better off trying to get clicks. Of course, the best combo is lots of impressions and a high CTR.
In my experience you can get around the fraud alerts if you explain your situation to them (as long as you are legit of course). Certain times/sites will have certian CTRS.
Of coarse its nice to have a high ctr, but a better metric of how well your site is performing is CPV (my own metric, lol ;) it stands for clicks pr visitor, and is much better because some sites have low impressions pr visitor while others have high numbers. For example on my own site i had about 10,000 visitors yesterday, 7 avg. pageviews pr. visitor and a 0.5% ctr (same ads showd on all pages) if you compare those figures to a site with 2% ctr and 2 avg impressions pr user my site is actually performing better even if ctr is lower, because the user/click ratio is higher. so total number of visitors and CPV is really the best measurement of success.