Hey Jwnwn. try this link it should be of use. http://www.goldennuggetkeywords.com/blog/what-is-a-keyword/
Visit the link in my signature, there are some videos there to explain how keywords are important with your website.
keywords in links make the search engines understand the relevance of particular link and they tag the webpage with that keywords... Therefore keywords are extremely important.
Keyword is very useful for your website. To get rankings in Google you have to mainly concentrate on choosing best keywords for your site.
You ask a very good question. When you keep the hyperlink to your Keywords other relevant websites then Google will crawl that page with your keyword. In this way you get a good pagerank for your website.
Keywords are most important thing for the site. Choosing of Keywords is an tough task as it represents the entire crux of the website. Basically the search engines crawls the keywords on the site and then ranking of those keywords on the basis of the density kept on the site is decided. thus it works in the manner to decide the ranking and increase the search volume
With deywords, the SE can provide the most useful and relevant search result to a surfer search query. You can let the SE spiders find out what your site is about and index your pages in order to return the best results so people keep using their search engine. If you can match your on page content and keywords with what the want of the person making the search query, you can get lots of trsffic and be on the top of SERP.