My eStore Structure

Ok I was doing some research about having one huge website or multiple niche websites it seems like having multiple niche websites was the better way to go according to the posts i read (I think I also perfer multiple niches, because of the whole eggs in a bag thing lol ) .

But In my instance im not sure how I should structure the site. The niche's I have chosen are very similar in fact they are the same thing but they are separated by type. Ok now i have a few questions about what im thinking of doing.

1. Say my niches where about cakes. Now i wanted to have different websites for lets say chocolate cake and vanilla cake. This seems like SEO will be easier for some resean. But now my problem is, I found a few keywords that I can rank for that are directed at both sites eg: "best cakes". Now I need to point the link to one of them right, so am i correct in saying that I should have one site and just point the keyword to the domain?


2. Since this is an ECommerce site where should I point the "common" links, the main URL or should I get a blog (assuming I decided on the one site structure)?

3.I was under the impression that SEO is easier when you have different domains because ( I read this some where, please correct me if im wrong) The new update will penalize you if you publish more than 7 articles pointing back to you domain in a day. Now does this mean with the "one huge site" structure I have to choose my articles carefully or does google treat sub domains differently from each other and the home url?

4. Seeing as this is an ECommerce site now obviously there isnt any content. So is it ok if i link back to any of my product pages, OR MUST i get a blog so there is some content to link to?

Ok I know this way be kinda long but I am very exited here and would appreciate any sort of response.

Thanks in advance!!!