[Disclaimer: In the past I've worked as a freelance web designer for a local SEO company. I currently do some "on the side" web development, and have recently added SEO content writing and SEO optimization to my list of services.]
The search engine problem really is broken down into two issues. First, can the search engine find you; second, does the search engine think your site is valuable to potential visitors.
Regarding the first (can the engine find you), in the "olden days", you used to have to submit your website to the various search sites for the search engines to find you. Now, this is done largely automatically, by finding links to your website via other links -- the cross-linking you described. So yes, having your site linked from others is valuable, since it helps the search engines know that you're "out there".
Regarding the second (where do the engines rank you), it used to be that having lots of links to your site was what search engines cared about. That's where the idea that lots of in-bound links is important came from. But as I'm sure you can imagine, not all cross-links are created equal. It's too easy to spam your links in all sorts of irrelevant places. So the search companies wised up, and now they consider a much broader number of factors apart from just how many in-bound links there are. In fact, just having a lot of random cross-links out there can actually hurt your ranking.
Modern Search Engine Optimization (SEO) really isn't focused around link-building; having some highly regarded sites that have some conceptual connection to yours (for e.g. an online directory of car dealerships) could be beneficial, but it's not going to be the be-all, end-all of your search engine desires.
What's far more important is your content. How it's structured, how it's written, what keywords are included (and how often they appear in the content), how that content is structured in the page (is it a heading? a paragraph? in a list?), and things of that nature. A huge part of SEO is figuring out what people would type into a search engine to find your site, and then finding ways to integrate those key words and ideas into your content -- without overdoing it, of course, since search engines have also wised up to "keyword overloading". And another huge part, if you really want to be up near the top of the search results, is to constantly be monitoring your search and traffic patterns, to make sure that people are actually using your site in the way you envisioned, and that your site is reaching the right audience.
I could go on and on, and talk about keyword densities, and all sorts of nitty gritty details about how SEO works and doesn't work, but that should be enough to give you a basic idea.
The short version? Don't worry so much about finding all sorts of people to link to you; instead, focus on writing excellent web-content that is readable and valuable to both search engines and people. The links will come.
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