Just a quick research note: because your use of niche keywords also can encompass larger niches, you can actually move up the highly competitive ranks by simply improving your own page optimization and back links - not having to change your keywords or re-edit your pages.
"Online" is too huge. "Online courses" is huge. "Online self-help author course" might be a niche you could rank high in. However, when you do, you will also start moving up in Online, Course, Self-help, and Author keywords.
As you capture a niche, then build your mini-webs, you also improve your own page rank. This then improves your standings in the major terms as well as that little niche you've picked out. So when you pick out your niche keywords, you should keep that in mind.
This is really useful for having a product first, as opposed to finding a hot niche you can stake out for affiliate or PPC links.
But the idea of taking over a niche and then expanding that niche is a great one. Properly done, you could conceivably move from a five-word long-tail niche right up to having a two-word major piece of search engine real estate - and holding it against all contenders.
Now don't get your hopes up, though. Be happy you can share the first search page with these guys that have tons of in-bound links and on-site pages. However, a properly optimize mini-net can actually bump many, if not all, the "competition" off it's game while you meanwhile then back up your claim with lots more pages you add each week, in addition to comment, blog, Squidoo, and article marketing (not to mention social bookmarking), all of which add in-bound links to your site. It's really just how good a site you can create and maintain.
If you do a survey on some of these medium niches, you will see that they really aren't seriously optimizing their pages. And most of SEO "gurus" I've read up on are bound to dally in the latest trends rather than really figuring out what works on the long term. (Guess what - it's great, original content served up on a long-term, regular basis; that people actually want and can use. You link things properly, to not give up your own pagerank to sites that don't benefit you. People find your site useful and find many links which all say the same thing about your site - which is exactly what the site itself says. Search engines reward site and link integrity - especially over the long term.)
I've got some more to post soon, since I was able to digest a great bit of data over this weekend (day jobs are good for some things...) and have pulled together a working plan of how to best optimize a site, based on four experts I've studied up on. It's simpler than it seems - and you can do it without any real expense.