Optimized DN make a difference?

Hi All,
I have a client with an excellent website that is optimized from here
to eternity. But are they are on page 1? Of course not! Their
competition, a plain little site with almost no optimization, no meta
tags and 1/10th of the inbound links constantly out ranks them with
top 5 first page rankings.

I am trying to consider the possibilities. My client sells a lot of
services (medi-spa stuff) but wants to be tops for Botox in their
geographical area. Their competition has a smaller site but it is more
focused on Botox.

1. Would the competition be getting better rankings because they have
"botox" in their URL?
2. Would it be beneficial to have some "botox" URL's pointed to the
main site of my client?
3. Does the presence of a lot of information (related but different:)
dilute the value of the individual components?
4. I am suggesting a spin-off site focusing entirely on Botox with a
"botox" URL. Linked to the main site but a separate entity. But they
want guarantees that this will work before they invest in it.

Any ideas?

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