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She comes along a site that is definitely targeting 3 key phrases, over about 25 pages. The first keyphrase would be "widget wodget", the second being "widget wadget" and the third being "wedget widget" - (this is getting ridiculous I know!) - however the over all most present keyphrase by far throughout 75% of the site is the first one, this has the most people searching for it, and the second and third have about half the amount.
My question is, although the domain name is keyword loaded with the first keyphrase, will the second and third keyphrases suffer as a result?
and
Will keyphrase 1 suffer because of the 25% of pages dedicated to the second and third keyphrases, effectively does Google measure keyword density by page or entire site?
Google measures keyword density by page, not by site. This strategy will not hurt your 2nd and 3rd keyword terms.
You are effectively asking about the use of themes here. Do a search here at WebmasterWorld for themes and you'll find a lot of in depth discussions.
Themes are a great way to organize and manage your information for the users. At this point in time Google is not a theme engine. Many of us expect that Google may evolve into more of a theme engine over time, so it is good to be ahead of the curve, and themes just make sense as a way to organize your content.