So if my home page of a blog ranks for the keyword I'm going for and I have the post dealing with the domain/keyword stuck at the top, would reducing the number of posts displayed per page + shortening the amount of text in each post displayed (except the first one) make the keyword density higher and have a positive affect on my SERPs or would this just be inconveniencing those actually reading my blog?
Keyword density does not affect serps that much. You have to make sure your text has synonyms of your keywords set. Like normal grammar and style rules. Do not reduce the number of posts per page , just keep on adding relevant fresh content and links
I think keyword density is overblown. Just make sure your content makes sense, is accurate and useful/helpful to the reader and the rest will work out. No need to focus on 3%, 5% or whatever density....
As long as the keyword density is so high that the posts just look spammy and unreadable to views you should be fine.