Trying to optimize an article through keyword density has gone the way of the dodo. I don't know if Google still slaps for density too high -- maybe someone else can weigh in.
Read up on some more current articles on on-page SEO and I think you'll find that placement of your keywords and including related words and phrases will help you more.
But I could be wrong...
You're absolutely right.. cramming a page full of keywords doesn't do a bit of good. Still, one can't ignore them either.
My suggestion, write the article as you would without using keywords, then let it sit for a bit. After it has a change to indexed, then make slight adjustments if need be to increase rankings. If the keywords don't make sense, don't do it. Content is way more important.
Im with lrohner - paying attention to keyword density, at least any attempt to intentionally sculpt a certain percentage is pointless.
Perhaps those who intentionally stuff poor content with key phrases may be "dinged" if they go overboard.
One will still see lots of references to keyword density in calls for work and seo writing job boards, especially when some element of article spinning is involved.
Perhaps when content is just chunks of text and not something that a human will read , different rules apply?
At least with Hubpages i find these on page factors to be plenty powerful by themselves - focus on the content based on how you want a human to perform when reading it - following the suggested practices to help SE's properly organize your work should be sufficient to get them there in the first place.
Of all the things you could be focusing on right now - keyword density is quite low on the list.
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