Please Read and Try Not To Judge =P I'm Lost...

Allright so I feel like I'm kind've in a rut right now. I'm going to lay out my situation and any advice, suggestions, and guidance on what I should do and where I should go next would be greatly appreciated.

I have chosen my niche and I have done my keyword research to come up with a list of my top 13 keyword phrases that have relatively good exact and broad daily and monthly searches as well as an average CPC cost above $1.00

Now I'm taking my list of 13 KWP's and determining the top 5 that would be the best out of those 13 to build 5 individual sub-niche keyword targeted affiliate websites around. To determine the top 5 that would be the best to promote I'm of course looking at my competition for all 13 potential KWP's.

Well I've done my competition research and this is what I've come up with, more or less, for all 13 of my potential KWP's. All 13 of my KWP's have, what appears to be, a TLD for all 10 search results when I enter a Google search (both with and without quotes); such as for example: the first result would be www.keyword.com, the second result is www.relatedkeyword.com , and the third result is www. yetanotherrelatedkeyword.com and so on and so forth through to result 10. Some of them however also may have it this way; www.companyname.com/exactkeyword -or something similar...

None of them have any 'user-generated' content within the top 10 results, like there is nothing from yahoo answers, or youtube, or similar sites..

So I'm assuming - all 13 of my potential KWP's are bad? I have no chance of ranking for them?

I'm using SEO Quake to determine this competition as well as Traffic Travis and some (not all) have the robo.txt file but not the sitemap or vice versa, and some have both but I didn't find one that didn't have neither.

Plus, there were surprisingly quite a few of these sites within the top 10 that didn't have the keyword I am targeting within the Title, Description and H1 Tag (which I would be certain to do to my sites) - however most of them have a considerable amount of backlinks as well (I plan on creating backlinks using article marketing but some have so many backlinks I don't know if I could ever catch up)

So you see....I'm just at a standstill right now because I am unsure whether I should be searching for the silverlining and go ahead with 5 of my chosen keywords still, try to rank for keywords that have less competition and are easier to rank for but also bring in a measly amount of daily and monthly searches, or just scrap this entire project and give up IM.

I need some encouragement, advice, suggestions, tips, hints, or anything that will either motivate me in the direction I've been moving or to be told that yes I am wasting my time with this unless I want to work on it for years before I ever rank.

I of course don't intend to rank overnight - but I'm hoping that with alittle hardwork and excellent on/off site seo I would be able to rank within the top 5 for atleast one of my 13 potential KWP's within a month. :rolleyes:

I dunno - am I hopeless? Please help and thank sooooooo much for any and every response I can get, you have no idea!!