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2. It gets added itself, you just need to have other people linking your site, and getting clicks, then it will be higher up in google
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Inaccurate, the Google algorithm is a lot more complex than this. Infact, you should be wary of who and where you let link, known 'link farms' will damage your SE position. Recipricol (sp?) links work well.
Have relevant content websites link back to you, keywords 'surrounding' your link work wonders, I'm no Google or SEO expert, but I can tell you that if you wait for it to be added, and it's not a TLD, you'll be waiting awhile. SEO is a very tricky task, there's no specific steps towards increasing your SE position.
I'm lead to believe Page Rank plays a small part, however what do a bunch of links mean if your site is on the 100th search results page for your primary keyword?