WOW!! This is indeed a very long question!
Let me start with the bad news that Google is tightening the space for low quality link builders and website that are using low quality spam but they are not finished and you will see some websites here and there (even in some busiest niches like SEO) that websites are ranking on money making keywords on the basis of low quality spam.
The websites that are ranking for the terms “SEO Services”, “SEO Company” and related keywords sometimes contain hidden links in their link profile (not one or two but tons of them). If you notice these SERP positions over the period of time you will notice that these websites does not stay there for a longer period of time and results will change after every few months.
The website, I was noticing 5 months back is nowhere for the term “SEO Company” at that time it was ranking on the first page somewhere above the fold for this keyword.
Ok, so now your second question simply divides 2 type of SEO the unethical SEO and the ethical SEO. Both works well but one is short term while other is a long term game. Now it’s up to you, how you want to play!
About Guest Blogging, yes Mat Cutts said its dead but, I have my personal opinion on this and I still believe if you can create value from your guest posts, you should go for it! I shared the detailed review on my site: http://www.setalks.com/guest-blogging-dont-panic
What are the high quality links that required hard work?
There are actually tons of examples but I would love to share few of them!
- http://moz.com/ugc/how-to-get-on-national-tv This talks about how to get on National TV and obviously this much have given him tons of links as well.
- Here is the post that will talk about how you can get links naturally to your website: http://www.setalks.com/natural-links
- This broken Link Building guide links are hard to achieve but valuable: http://moz.com/blog/the-broken-link-building-bible
- Read this, where experts are sharing that best link building tip ever: http://digitalphilippines.net/link-building/
Hope this helps!!