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Igor Are you seeing these warning/errors for Duplicate Titles or Descriptions ? And are you seeing those via the Google Webmaster Console ?
I see there's an opportunity to customize the meta data a little bit better then what it is currently and it would help to know where the errors are coming from and how you are ranking for some of these terms.
Savio
It's always a good call to remove unwanted links, links that user's don't use. Sometimes these pages are thin content pages, lead to within the site duplicate content issues as well. I would strongly recommend removing the links, but then just with this change, expecting a major change, I guess not, but then it depends upon all the other metrics of your website.
It might also make sense to consider doing a no-index on them. Is this a wordpress blog ? If yes, you can use All-In-One SEO ro Yoast SEO Plugin to noindex on you tag pages.
Then look at your website and see if you see any SERP movements and continue to audit the site and refine the structure, add new content, build links and repeat. It's a continuous process you know I am sure 
I hope this helps.
I agree with Tim and Adam and that said, sub-folders are better as a general rule of thumb for sure.
You might also want to refer to other similar questions here on SEOMOZ.
http://www.seomoz.org/q/blogs-are-best-when-hosted-on-domain-subdomain-or* http://www.seomoz.org/q/setting-up-a-company-blog-subdomain-or-new-url* http://www.seomoz.org/q/blog-vs-blog
and the post from Matt Cutts as well as the article from Rand that Adam mentioned.
Diego, As Paul said, do not chase the page-rank. You can however get a better idea using SEOMoz Opensite Explorer.org's DA/PA (Domain Authority and Page Authority Score). Again, this is just to get a rough estimate on a relative score comparison between you and your competition. I hope that helps.
Tks, is it just for 1 keyword or a lot of keywords / URLs combinations that you are noticing the off-page strengths being strong but still not ranking. To me it's an opportunity to do the architecture SEO Audit and see what you can do to help the entire website, structural changes. If it's just 1-2 pages, then copy optimization, meta optimization on that page along.
I hope this helps.
I agree with Jared. No need to convert the product titles into H1s or H2s. If there were sub-categories on this page, then it would make sense to have the primary category as H1 and the sub-categories as H2s and so on. But products are not H2s / Headings in this layout.
A description would be good however.
Thanks for the update Erica. Great question David. I was thinking about it a couple days ago.
For a franchise scenario, it would be best to use a sub-domain, however it does depend on other things as well.
1. Would franchises be able to control / add / edit any content on these sites ?
2. Any duplicate content issues between multiple sites ?
3. Do all of them need to be indexed in the search engines and getting/targetting search traffic ?
As a general rule, for SEO, sub-folders are much better, but in your scenario, it's a different case.
You might also want to refer to other similar questions here on SEOMOZ.
and the post from Matt Cutts
http://www.mattcutts.com/blog/subdomains-and-subdirectories/
Kyle I was not aware of it, but looks interesting. Thanks for sharing. I agree with you, I think it could be useful. Thanks.
I haven't used this tool but it looks like it should do what you are trying to do:
http://www.transabacus.com/ TransAbacus gets a website address or URL and returns the list of pages on the site, with the number of words for each one. Optionally, the user can also get the number of words in title, alt text and meta-tags (whose translation is as important as the body translation because several search engines use them to accurately index the web page, but unfortunatly they are generally not considered at estimation time). Additionally, TransAbacus counts the words in text files linked by the URL (the current version of TransAbacus counts the words for .pdf, .txt and .rtf files).
P.S. The only downside is that this is a software tool installed on your machine rather then an online service.
Another one that looks interesting is:
http://www.inspyder.com/products/InSite/Website-Word-Count.aspx Use Inspyder InSite to quickly get the word counts of virtually any website. No more "copy and pasting" page after page into Microsoft Word. Now you can word count an entire website with a few clicks of your mouse!
InSite provides a variety of word count information, including total words on site, total words per page, total unique words and totals for each individual word. InSite allow you to save your word counts to PDF or Excel.
It really depends on the niche and the kind of websites you are trying to promote. If it makes sense, I would try and start with 1 website and optimize it for global and see how it works for you. Based on your success, you should be able to decide what the next steps are and usually it makes sense to continue to strengthen that 1 website, but then do you like all your eggs in 1 basket. It becomes a tough decision.
Therefore, I'd recommend you to concentrate on 1 for now and see how that evolves.
Thanks Rob. @Tutugirl, see Rob's answer. He answered the timing piece very well... "IF they were really press releases, how would they be timed? "
I agree with Robert. There could be multiple other factors. The search landscape has changed and evolved drastically in the last 10 years. And it will continue to. The economy adds to the competition because everybody is trying to get online and get a piece of the pie. You are definitely as the right place in terms of trying to figure it out. I would suggest getting an SEO Audit done as well as a competition analysis and create a plan for the next 3-6-12 months to regain your position, strengthen your domain, brand and do whatever it takes to get back on top. What it would take, depends on what your competition is doing. I hope this helps.
If you have a reason to have a press release, definitely do it. Think about it from a user's perspective. If they see your press release in Google News, would they read it and if they do, is that something they'd call a news ?
As for the distribution, yes, all/most sites have "some" SEO value. But the way I think about a PR is...distribute it with the intent of it getting picked up by offline media potentially and other news outlets..not just for the backlink.
Also, I would not recommend doing too many press releases just for a backlink.
I agree with Mathhew. completely. Test it on a small scale, there are so many other metrics that influence the rankings that it's best to test it and if it works, do it on a larger scale. Quoted from Mathhew's response "Another way to approach this would be to take a sample of ~50 products that get some traffic from search right now. Take unique pictures and write unique content for those products. Then, measure the results. Did organic traffic increase after 30, 60, 90 days? If so, you know that you've got a problem with duplicate content worth correcting."
I agree.... love the dashes only. Also a little bit of usability, dashes are easier to type (not that a lot of people are typing long urls with dashes or underscores, but dash is one key press and then underscore is 2 keys)
I agree with Anthony...go ahead and do it. If there are any old links you can get updated to the new domain, it would only help and then new links to the new domain of-course. So yes, no need to wait really.
I agree with Marko & Matt. Just do domain.com/blog or janesmithphotography.com/blog It makes perfect sense to do it that way. Even sub-domains are treated as separate domains, so blog.janesmithphotography.com won't be as good as if you do janesmithphotography.com/blog.
Is the URL generating a 404 / included in robots.txt as an exclusion ? If yes, you might want to check with a HTTP header tool to verify the correct 404 is being displayed. Maybe post details here. If nothing works, send a message in the Google support forum and that should do it.
Removal Requirements (https://support.google.com/webmasters/bin/answer.py?hl=en&answer=59819)
To remove a page or image, you must do one of the following:
Yes, that works. Essentially, I think a canonical is a better solution. So it's perfect. After a couple days, check the 2 URLs in Google using cache:url1.com and cache:url2.com and see if Google detects them both as the one you are using in your canonical tag.