What is keyword density and how does it help a website in the search engines? Well, it's all about the word 'theme'.
When a search engine turns up at a website to refresh the cache for the page, the thing it really wants to decide is what the page on that site is all about. Have a mix of different links and no real theme to the phrases, and the spider will struggle to keep up with what you want to get ranked for. Implement a good ratio of target key phrases into the text, anchor links and meta details, and you are half way to getting ranked higher due to a good keyword density.