Hello,

Assuming that we leave blogging out of the equation for now...

(Since you should be using a blog to provide value to readers, and will probably going for longer-tail phrases rather than things like "keyword-or-service in City")

My strong preference is building sections off the root domain rather than microsites on subdomains. You'll get more benefit from the other tactics you mentioned with this setup than you will from subdomains. You'll also have a far easier time of it trying to rank one site with multiple pages, rather than a new site for each location.

Realistically, the subdomain and new site tactics are going to be either 1) A massive amount of work to write great content or 2) Full of weak content. Using the root domain, on the other hand, allows you to rank for your keyword and location while still offering visitors great content that is more generalized (assuming that your different locations provide the same services).

Link-building wise, I'd definitely focus on building links to the location pages. I would be wary of getting too specific with your anchor text, however -- I wonder how much value there is in a link where you could get anchor text that includes both the keyword and location, and too much of it is going to look artificial very quickly. In this situation, I rely more on on-page targeting and strong local search listings for each location than I do anchor text.

I'm sure others will have more to contribute, but I hope this helps.

As you did, I'd normally handle this with a 301 from index.html to the root domain. When you say that it's "not had an impact" do you mean that the SEOmoz dashboard continues to show an error after it re-crawls, or that the search engines are not picking up the redirect?

SEOmoz dashboard does a great job, but I'd check to see how the search engines are actually indexing yourdomain.com/index.html vs. yourdomain.com also. If the search engines are indexing it as you want them to, then I'd be inclined to ignore the dashboard error.

I apologize if this is a stupid question, but I assume you manually checked that the redirect worked?

To me, that's not what your 404 page is for. I wouldn't recommend doing it. What happens if they typo something, or hit a bad link some other way? There's no message to tell them what happened and it creates a confusing user experience.

Better, in my opinion, to redirect the file individually

Arti, there's a good article on SEOmoz about redirects. Down the bottom, there are some how-to guides on how to do things like 301's. Just be careful of infinite loops if you're using apache.

http://www.seomoz.org/blog/url-rewrites-and-301-redirects-how-does-it-all-work

No. There's no difference between a mobile number and a landline number. So long as the mobile number has a local area code.

As Anita said, just remember to be consistent.

Unfortunately I do not have experience in the UK. I have done a smattering of work in New Zealand (for friends, since that's where I'm from originally)  where the mobile number system doesn't have area codes (027 and 021 are the only two prefixes for mobile). For more competitive phrases, I've never seen a business using a mobile number rank. This is only for a very small amount of work, however, and it could well be that there are other factors in play (such as the fact that the people using mobile numbers don't have any optimization, either).

I have a hard time believing that the UK algo would be so massively different from the US one that it would ignore phone number area codes.

Because it's a fairly big factor in the US, if I were being asked to make the call, I'd go with a landline with a local area code, which forwards to your mobile.