I was told that SEO is about pages, not the whole site. Google ranks a page. That means there is no difference whether I create 1 general site with many different products pages on it or whether I create dozens of separate sites of each individual product? Am I wrong and why? What is the difference?
the difference is that with one site, each page is interlinked and usually with proper anchor text and relevance allready establish.
Well, well chosen domain itself has some value and it's much easier to get links to main domain, than sub pages. But after all, depends on what product type site you had in mind.