1. 500 word for a blog post. Although these days, its the longer the better. But it really depends on your niche. I don't seen anyone writing a 2000 word essay on banana milkshakes. Sometimes, the more pages your site has, the better it will rank overall. But if you want to rank a particular page, a lot of good content will help
2. I think the general formula is 2% keyword density.
3. Yes, keyword research is the most important part of building a niche site. An extra hour of keyword research could mean an extra $50 a month.