Think of the Yahoo Directory.   It has cost associated with it and a listing there indicates a real website rather than spam.  Whether no-follow or not, if a directory carries trust and authority it is beneficial.

Regardless of what is said, these listings do add to your metric profile and do contribute to ranking.  Just like all the other "non-working" link types (read Press Release etc).

Don't believe me?  Go disavow or remove all your no follows.

I like to use my keyword in url, a synonym with hi cooc and CTA in title then another synonym with high cooc in h1.  Careful with anchor text if you use keyword in url.

Heading over to Quora, Yahoo Answers and related site types is a great way to seed your FAQ type posts.

Try to answer these questions with as much detail as possible as it will gain return readership, especially if their pain was relieved.

You can worry about the finer details if you would like but providing relevant help answers to industry questions is always going to be a plus.

I would create a piece of content for the head term and call it the mom.  Then I would create many children with each child targeting a tail set of synonyms referencing  the mother.

These children would live on the target site as well as related topical sites and web 2.0 properties.

Mom and children alike would get pretty and all dressed up with table of content's style interlinking to encourage user engagement and long click like activity, especially on the target site.

Long story short is that both are important and if the content is good you will receive tiered social signals and linking naturally via this practice.

That said... I am a very big proponent of increased site production and if I had to choose one over the other I would take fresh topical content with proper interlinking on my site any day as it means new ranking opportunity, user engagement and almost always new traffic.

With a 50% decline chances are you are being stalked by either a bird or bear.  Heck, they could be teaming up to chase you around.

My recommendation is that you do nothing to your site until someone has conducted a full audit and it is key the person conducting this know what key indicators to watch for in your sites history regarding panda and penguin.

I tend to see much more unnoticed panda hate than unnoticed penguin hate and many people have told me they were hit by a bird but closer examination revealed the real culprit was a bamboo loving bear.