Is it ethical that i buy multiple domain names related to same theme and optimize them for different keywords.. and after all the domains ranks well in the search engines than redirect all the traffic to my one website and then use it to grow my business?
Sure its ethical i guess, they are your sites your building them up to funnel traffic. If you build it up then redirect you may lose some traffic in the long run and you may not. Your best bet might be just leaving them all up on different hosts and building up the one main site by link to the main site from the other sites. Just make sure if you do redirect that traffic, the traffic doesnt have a high bounce rate
JMO but once they're ranking well you'd be better off linking them to the domain rather than redirecting them. I assume you're talking about a 301 redirect? Once the "redirect" domains that are optimized for certain keywords get ranked and you redirect them you'll eventually lose the ranking for that keyword.