SEO is Search Engine Optimization. Basically a fancy term for 'calling the item what it is so a buyer can find it'.
Its not only tags, but the combination of the title and the tags.
First off, start with the title. What are you selling?
For example, you are selling a 'fish hook heart". Now from that title, that could be just about anything. Is it a painting? A piece of jewelry? A purse? A fish hook in a heart shape?
http://www.etsy.com/listing/99739833/fish-hook-heartWhen I do a google search for 'fish hook heart' I get all sorts of things coming up from charms, fish hooks shaped like a heart, embroidery of a fish hook, and a fishing heart fitness video.
So the first thing you need to decide is WHAT your fish hook heart is. Is it a key chain fob? A necklace? A pull tag?
Once you have decided WHAT it is, then you can write a great description. Include the measurements and all other information that a buyer may want to know.
When it comes to writing tags, start with the key words and phrases from your title. Don't use tags that describe possible uses as that really doesn't help you.
So for your fish hook heart the tags I would use would be
fish
hook,
heart
fish hook
fish heart
hook heart
fish hook heart
You've got a few tags that really aren't helping you. Its NOT a rear view mirror, is NOT a fisherman, and its probably not a car accessory. It can't be both a keychain and a charm at the same time so one of these tags should be removed as well. And its definately NOT an outdoor man!
One other thing to consider would be your shipping charges. Will it really cost $5.00 to ship this within the USA? The postage would be approx $1.81 for a small package so you've got $3.00 allotted for packaging and other expenses.