If you had to define SEO in one sentence to an audience of people who most probably would not be interested in the technicalities I think the above is close enough. It's the public he's talking to not the SEO community.
All of you who are trying to dismantle this article should bear that in mind. You should also bear in mind that almost anything you read in the media could be torn apart by the experts in the area in the subject matter. Reporters cannot be expert at everything so all they can do is report what they see and I think that is what Jon Honeyball did ;)
They (and the other SEs) could start by putting the hotel websites at or near the top on a search for the hotel name. I would be willing to bet that 95% of those who search for widget hotel smallville would prefer it that way.