How many keywords do I target on each page?

Hey guys,
my question comes after reading, Ivan Strouchliak's seochat article titled 'Advanced Keyword Research Strategies'

basically he stated that one selects a number of core keywords for a site and then create a number of different keyword phrases from those core keywords. So a core keyword may be "waterfront homes" and then one may research and find a number of keyword phrases based around that core keyword such as "waterfront homes for sale" and "sydney waterfront homes".
Another core keyword may be "luxury homes" and a keyword phrase that relates to that would be "luxury home properties"

My question comes in writing content.

Some people say that one should target one core keyword term per page to be safe.

What would happen if i targeted two core keywords? could i not combine "waterfront homes" with "luxury homes" (if it makes sense) and potentially receive equally high rankings on both keyword searches "waterfront homes" and "luxury homes"? Could my title not be "luxury waterfront homes"?

according to google one should use "broad keywords" to gain more traffic because one does not know that people will enter the exact term one is optimizing for. Therefore doesnt it make sense to try and combine core terms if possible? (see more about broad terms at in google help)

As another example, one of my keyword phrases for the core keyword "luxury homes" is "luxury homes for sale" and another core keyword is "waterfront homes". Would it not make sense to add in "waterfront" into "luxury homes for sale" so as to make the phrase "luxury waterfront homes for sale" thus capturing both markets? would the page still not rank equally as high for "luxury homes for sale" and "waterfront homes"?

However when i type this full phrase into google's keyword tool i see that i only get a "local search volume" of 16 searches (broad match) for this phrase. What does this result mean? I guess it means that only 16 searches have been done with exactly those words in it.

While this may seem quite low... would i not still rank JUST as high for the keyword searches "luxury homes for sale" AND "waterfront homes" or would i potentially rank lower for these because i have somehow diluted them? in this sense, how does one dilute a keyword phrase? does it matter that in the previous example... "luxury" is one word away from/seperated by "waterfront" to "homes"?

So in sum... my question is "how are keyword phrases diluted?"
and following this, "how many core keyword phrases is it safe to target on one page"?

thanks for the help

Simon

one more example may help clear things up:
I have two phrases "waterfront homes for sale"
"luxury waterfront homes". If i were to combine them and include them in the the content, i would see "luxury waterfront homes for sale" on my page. Does this mean that i would still rank equally as high for both phrases?

you need to add relevant content for your keywords and if you need to rank them then you have to built backlinks and target those keywords on your link title ( anchor text )

you have to create backlink from other articles for both phrases in order to rank them

This is only my opinion but the concept rings true.

I think you can only target one keyword phrase per page since the core of your on page optimization is rooted in your title tag, and after one phrase you don't have much room to stuff anymore.

That doesn't mean you only build content around one phrase.

I would approach content with target concepts that are concisely written for one idea. After you've done that, you can insert your primary keyword in a coherent manner in the title element.

FRom there, since you've written great and well thought out content <-- KEY, you'll have a NUMBER of keywords that the search engine will find and hopefully rank. Each word on a page is technically a keyword, and the ones you place prominently in the title element will get more attention.

After that you can help boost each page keyword phrase by finding in bound text links with the anchor text of the phrase.

A part from that take this advice: approach content through the users eyes and write something that adds lasting value to your target visitors. Don't worry about looking at lists of what 'might' be keywords and then build from there. Learn about your market and write stuff for them. And don't stop at a littl ebit of content either, keep going if you can!