It took me a REALLY long time to figure this out, and I would hate to see someone else go through the pain I went through!
For google, yes, 70 characters is what it takes, but that doesn't mean that your title has to be that short. You need to make sure the most important parts of the tag are in the FIRST part of the title. For example, for your pink hat, the first word needs to be hat and if you want to put beanie or other words for hats, they go at the beginning too. Then you describe what kind of hat...etc.
For the tags, single word tags are not what they are looking for. The tags should be phrases that your buyers would put into the search to find your kind of item. So, for your pink hat, it would be "pink hat", "pink beanie", "crochet hat", etc.
Hope this helps!