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my head is spinning and don't know where to start
This is a pretty good place ...
Successful Site in 12 Months with Google Alone [webmasterworld.com]
My opinion (7 years worth of SEO/SEM), is to not try and go into information overload.
Most ebooks are outdated even when they finally publish.
You found WebmasterWorld, and I don't think you will have to venture outside of this community too often to get answers to your questions, learn proper techniques that are successful, etc...
SearchEngineWatch is a good publication to subscribe to, because it covers "current" events in the SEM/SE world..
PlanetOcean also has a good publication.
Outside of those two, I read/contribute only here.... :)
If it's for your tags, then 10-20 is about right. If it's for PPC, the more (relevant) keywords the better.
It's basically the:
"Does the chicken come before the egg, or the egg before the chicken" Syndrome...
If you develop content first, without doing a thorough keyword analysis, you end up with great content, that will miss part of your target audience.
If you do the keyword analysis first, then you end up developing content around the keywords, rather than on the subject matter of your site.
You have to find the balance.
Think of "themes" when you are designing a site map. Each page centralized around a specific product/service/etc.. The body text should be focused on the broadest/most searched keyword phrases associated to the "theme".. Then after your first draft of your body text, go back and "sprinkle" in lesser searched keyword phrases that are still relevant to the product/service.
The key is to keep the body text readable to the consumer, and balanced.
There are many posts here with discussion of keyword density, etc... You have to experiment, and track your progress. Organization is everything!