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I think that your choice of KW vs KW phrase really depends on if the terms are super popular. If you have lots of competition, single word KWs will be harder to rank on. For me, 2 and 3 word KW phrases are easier to rank for and bring in a significant amount of traffic.
As for how many times to repeat it on your page, well that seems to change as the algo's change. I would say that you write the content of the page and use them where it makes sense and doesn't make the page impossible for a surfer to read.
Take for example the following people find your site:
Person A : searched for "Widget"
Person B : searched for "Blue Widgets in Yourtown"
You'll get higher conversions with Person B *and* have an easier time reaching the top of the rankings (note easier, not easy :P).