Totally agree — more does not always equal better. Google takes a sort of ‘Birds of a Feather’ approach when analyzing inbound links, so it’s really all about associating yourself (via inbound links) with websites Google deems high quality and trustworthy so that Google deems YOUR web page high quality and trustworthy. As you mentioned, trying to cut corners, buy links, do one-for-one trades, or otherwise game/manipulate the system never works. The algorithm is too smart.
Despite this many people seem to get it wrong! In particular “Chris Ridings of www.searchenginesystems.net” has written a paper entitled “PageRank Explained: Everything you’ve always wanted to know about PageRank”, pointed to by many people, that contains a fundamental mistake early on in the explanation! Unfortunately this means some of the recommendations in the paper are not quite accurate.
Moreover, the PageRank mechanism is entirely general, so it can applied to any graph or network in any field. Currently, the PR formula is used in bibliometrics, social and information network analysis, and for link prediction and recommendation. It's even used for system analysis of road networks, as well as biology, chemistry, neuroscience, and physics.
Google's core algorithms and its propensity to shroud its data in layers of obscurity is not something new. However, it is critical to any understanding of marketing on the internet simply because this visibility is at the heart of everything else that you do. Forget about social media and other forms of marketing for the time being. Search engine optimization (SEO) offers up the proverbial key to near-limitless amounts of traffic on the web.