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George - you definitely need to work on link trades - Google is showing some 30 backlinks to your site (of course this number is bogus but its good enough) wheras you are trying to compete with people that have thousands of backlinks from "same theme" sites.
Also - your original question - alt tags are a good tool - as long as they are not abused - changing the text around, some other terms that type of thing - but even more important is that Google will place importance on other key "html elements" of the page when changing their algorithm over time - so title tags might be more important, the on page text, and just about a hundred other factors play into the ranking of the site.
I do agree nothing is penalized there - you wouldnt show up in Googles results at all if you were
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