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Google is pretty open about liking content and from my experience meatier pages tend to do a bit better.
The keyword density issue is one of my 'things'.. I have a theory that we've seen a drop in the ideal density level over the last year as Google moves towards giving preference to more natural language... ie, the sort of density you'd find in an article with paragraphs of text, rather than the short choppy dense text of other pages.
<add> duh.. I'm still too busy laughing at that OH article to make much sense. should have said I agree that G prefers more text. As to an ideal size, I'm not sure that there is one, bearing in mind the 100k indexing limit </add>
I tell you one thing I'm convinced of, tho. Google is just like the others in weighting massively towards the first word on the page, first on the line, proximity etc. IMO, you just can't do better than have that page which opens: KEYWORD in bold caps.