Technical optimization refers to all the factors related to the technical details of your website, and how they affect the ranking of your site in search engines. They are important because they give valuable information to the spider that crawls your site, and ultimately decides how close to the top of a search you are placed. And this visibility directly impacts the traffic and profitability of your website.
Optimizing includes:
Keywords in your URL (optimal, but not always possible)
Keyword density of about 8% per page
Key phrases that relate to the keywords of very page
Keywords in titles and headings
Bold and capitalized words
Keywords in the first and last sentences of each page
Keywords and secondary keyword optimization on the site