Adwords does not seem to operate by the straight auction model that Google claims. For example, I have numerous keywords that are shown as being "Below first page bid" or as showing in position 6+, but when I do a search on Google for that keyword, there will be only maybe one ad on the SERPS page. Can anyone offer an explanation for this? Also, having run several adwords campaigns over a course of years, with each one of them I find that they do well for a while, then at some point, the number of clicks drops dramatically for no apparent reason (yes, I'm familiar with all the typical reasons Google claims). Are these behaviors just a games that Google plays to pump up the bid price? It sure seems like it.
I'm not sure where you are located, but if you are not in the USA then that may be why you are only seeing one ad. A lot of advertisers target the US only so you may not be seeing those ads.
Yes, the first page bid estimate is nothing more than a ploy to guilt you into raising your bids. Best to ignore those messages and just add more keywords with the same bid.
what is your QS? if it is low - google may set a minimum bid try to improve your ctr with new ads to get a better QS