There are advantages and disadvantages SickKittens...
but I believe the advantages win...
pure targetted traffic is gonna convert better
not having to deal with 100s of submissions
easier to maintain
opportunity to split your chosen niche into sub/micro niches..
as grezpa said, recognition/branding will be easier
Traffic wise... if it is a really small niche you need to forget about "big numbers" and just concentrate on quality. Recips will bring you some, trades(cat or main) will work, all the usual things.
Niche LL/TGPs work... I am 100% sure GG and MML would agree.
DD