I have done more research than you could imagine, and I have gotten extremely good at SEO (Search Engine Optimization) for YouTube, so I thought I would make this guide. First, here are some examples of my videos ranking above huge channels and viral videos...
This video has under 400 views and ranks on page one of "How To Make A Game" Currently, I am working on getting this to the top spot, but it still is bringing me 20-60 views a day.
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Tags - Don't be fooled. Tags matter a great deal, and if you do them right, you can have results like the ones above. Lets pretend you made a cover of a Beatles song. First you need to realize something. You will not rank for the search "cover", so why should that be in your tags? It should not. From my experience, the more tags you have, the less important each one is. You should use more long tail tags. If you want to rank for a specific keyword, that keyword should be the only focus of your tags. You don't want the search engine to go "well they seem to want to rank for both 'cover music' and 'Beatles Songs', so we should rank them poorly for both". You want the search engine to say, "wow everything here is relating to the search 'Beatles cover song', so we should rank this video at the top for this search'. Indecisiveness is a negative trait. It is also very important to decide how many tags you should have. It is very debatable, but the amount of tags you have should be dependent on the size of your title and the broadness of the searches you wish to rank for. For larger channels, you can rank for many different searches at one time and use lots of tags. For smaller channels however, you should focus primarily on one search and only the tags that would apply to it.
Also, there are many other factors. Subscribers and current views are very large factors. The age of the video can be a factor as well, but you cannot control these. Lastly, it will rank higher if you are a partner and the video has ads enabled. If ads are enabled, YouTube makes more money, so they want people to view it. If you read this far you are awesome!
From my personal experiences and research, and I have found this area to be relatively inconsistent. For a larger channel trying to rank for an overall idea, yes you are correct. You want every single tag that relates what so ever. For smaller channels, it is often impossible to rank for things that are only semi-related. With that in mind, I tend to pick one or two search phrases to rank for instead of a whole area of videos. I have found that when doing this adding extraneous tags seems to lower the value of your primary tags. There is definitely a place for using the entire tag box, but oftentimes this seems to hurt results. I'm glad you agree with everything else. 
