I agree with Marcus...   When you make everything important then nothing is important.

Ideally, we would like to redirect everything and remove the old site entirely so we don't have to pay to keep hosting it. Is this possible?

Be sure that you don't save ten bucks on hosting but toss away thousand in content and the value of a redirect.

I would sniff the entire site for gems of content.  Anything that is better than what you currently have or supplemental to it.  If you can get new pages on your site that target keywords that have been off of your radar that could be a huge win.

Now... just saying what I do rather than disagree with others....  I keep an .htaccess file on that old domain for a long time - meaning forever....  you can do that inexpensively by getting a hosting service that will allow you to place multiple domains in different folders of a single account and redirect them.  Since I don't know exactly how long it will take for search engines to permanently remember I make it impossible for them to miss.

Most of the search engine traffic that enters my blog comes in through category pages.  It would be a huge mistake for me to block them.  However, depending upon the topic area of your site the category pages might have a different importance.

We are currently producing quite alot of engaging content and although it's industry related, it is sometimes quite broad and not always appropriate for our company blog.

The best place for this content is in a folder on your main website such as.... mysite.com/blog/

It is possible to run to installations of wordpress on a single domain.

If you don't want that content on your own site then placing it on a satellite site would be the next choice.

Running two different sites in the same niche is not a sin... and most hosts will give you a second IP address for a very small fee.  Ask them about it.

Why should there be a penalty?  This often happens for important pages - they are linked to more than once because they appear in the persistent navigation and also in some on-page links.

Although a lot of people think that only the first link counts, I would consider this a sign of page importance.

This used to work superbly until about 2003.  Then google was able to identify these sites and would drop all of the pages except one or two.

Cookie cutter pages are no longer useful.

I don't know where your data is coming from so it is difficult to give a reply in context.

So, let's assume that you have data from google webmaster tools.

Keyword A has CTR of 19% and 3000 monthly searches

Keyword B has CTR of 0.7% and 20,000 monthly searches

When I look at that data my conclusion is that KW A ranks highly - maybe in the top three... while KW B might be on the second page.

I would reoptimize the page a bit towards KW B if I thought that it would yield valuable traffic.

Always keep in mind that there is another step in the calculation... that if the 19% of people who click through KW A have a 0.1% conversion rate but the KW B people convert at 10% then that could alter any decision that you might have.

One of the most overlooked concerns is the navigation links that will drive power and anchor text into the product pages.

These could be from category pages, related product pages, article pages, homepage, blog pages, sitemap and more.

If you want your product pages to be vigorous in the index you need to drive some linkjuice into them.  In addition, on-site text links can work magic for your rankings.

Related links on product pages can also lead to increased sales and larger shopping carts.

What isn't so clear is that 2 years down the road this may be a really bad decision that was made just on budget.

I agree.

You never know how google is going to treat a subdomain.... but I have very few doubts about how they are going to treat a folder on my site.

So, if I was in the situation that you are in... I would move hosts,  or change developers,  or find something besides Shopify... to run a website that has the highest present and long-term probability to be as highly competitive as possible.

I work really really hard to compete for rankings.. I am not going to let a host, a shopping cart or a developer screw it up.

It's pretty easy to find new hosts, new developers and new shopping carts when you compare that to the huge job of getting 500 new unique domains to link to a store.  We are comparing issues of convenience to those that are jugular.

Just me sayin' how I look at this.

I have one concern.

There is a big difference in ranking potential between store.domain.com and domain.com/store/

With domain.com/store/ the pages in the store benefit from the authority and linkpower accumulated by the main website.  However, with store.domain.com the benefit is much less.

That alone would have me reject a solution that requires moving the store to a subdomain.

If NearlyKeyword.com has a lot of links that do not duplicate the links of Keyword.com then I think that you will increase the linkauthority and domainpopularity of Keyword.com.  I would expect to see a rise in SERPs across the entire site.

I would expect the same thing to happen in the opposite direction - if Keyword.com redirects to NearlyKeyword.com...... but I would put my money on Keyword.com as the stronger site to receive the redirect.

What percentage?  I don't know.

What does a keyword.com bring to me?..... The most powerful thing.  It makes me feel like "the man" in the keyword business and gives me greater mental energy to work on the site. That is a powerful force.