Best practices: What does really qualify a niche.

Hi All,
I am wondering if there is some kind of common understanding how to define measure a keyword niche.

Many SEO get rich guides I've seen don't go into lot of details on that topic.
Most of them say to check google adwords keyword tool. Ok there is this competition bar. What does it mean? The help text says it shows how many are bidding to have an ad placed for this keyword. So this must be one parameter.
A niche everyone is trying to get into is no niche one could say. But to me a high value niche could also be something that has high demand, but the competitors in the area suck or are not hardcore marketers, maybe just people feeling happy about producing content about something they like without much interest in SEO and monetizing. They just happen to be #1 because the SEO-sharks have not found that niche yet. That place probably doesn't exist anymore these days but some ponds are less known than others.

lets say I found a keyword phrase with fairly high search volume and the competition bar indicates that there is little interest by other marketers.

Now I have a keyword phrase which has some number of searches per month and is not much asked for in adwords.
Doesn't this also indicate that the niche is of low value? At least if you are going to monetize with adwords and none is bidding on that keyword.

What's the next step? The next natural step for me would be to check the SERP with the phrase. What result are popping up on place 1-10.
If I see that there are just hobbyists sites with childish web 0.1 design and weak content e.g. only one relevant short article, then I would say the competitors are weak ergo it should not be very very difficult to make a better ranking site.
Being the newbie I am, I have been doing this manually and with a gut feeling. But I am wondering, what are the best numbers to check.

On this forum I've seen people mentioning an average pagerank on the SERP. What is that? Does that score somehow give an indicator how strong the competition is? like if google did not find any super relevant content so it had to take some sites with just good enough relevance, where can I check this number?

What about the number of competing pages? is this number relevant to define if is a good niche or not? the number is usually several millions anyway so I don't see much value in this. right?

What I'm looking for is simple approach to follow as a start. Not too fancy but based on numbers rather then feelings.

e.g.
1) check adwords keywords.
if competition < 0.4 and monthly search > 10'000 goto step 2
2) google the keyword.
3) check the top 10 results for e.g. #of links to it, on page SEO of the sites, pagerank? some other numbers?
if competitor score is low then
start building a niche site.

So are there any common standards or best practices when it comes to niche-research. I mean just basic. Everyone has probably got some fancy additional methods. But I have a feeling that in the very bottom everyone is more or less checking the same numbers.

What do you think?

Thank you for your time.
kind regards
Fred