I've searched WebmasterWorld archives and can't find anything recent on what keyword density should be? Or is it just that keyword density just isn't as critical today when compared to just writing good content with the keyword phrase smattered in the text?
Furthermore, how relevant is it that the homepage be a targeted keyword rich page? What I've noticed is on G results that if I type in one of our 2nd tier phrases, we rank in the top 10 but the search results show our homepage's <title> and URL BUT the descriptive text shown is from a page two steps off our homepage.
So, what's this mean? It seems that the page is ranking well but what's being shown on the SERP is the <title> from the homepage which doesn't match the accompanying descriptive text nor the searched phrase.
I would say that keyword density is not as important as people say, or as it used to be.
I follow Google's advice of writing for the visitors, although I do include keywords as I am going.
For your second part; are you using the META description tag? If you are not, I would advice doing so. It is essentially free advertising space on the SERP's so it is key to place a paragraph in their that you think will bring in the visitors and include relevant keywords.