1) "MORE QUALITY PAGES and more QUALITY links = bette SEO from what the top SEOs have told me. "
For this purpose, indexed by Google counts as "quality." Please read the PageRank paper, and you'll quickly see that more pages in the index == more PageRank.
That doesn't always mean putting crap pages into Google is a good idea, but strictly speaking, it will raise the total amount of PageRank your site has. Seriously, read the paper yourself.
2) "but we don't scrape content. our search results do have abstracts but they are smaller than Google's, and in some cases they actually are google's."
Perhaps scrape is the wrong term. But you absolutely do include other people's content and nofollow it, for example all of the images on this page:
NoFollow is meant for links to content which you don't want to "vouch" for. If you've included their content in your page, I think you can vouch for it.
Maybe an honest oversight, maybe not. Either way, you know about it now, so fix it.
you are not scraping directly...you are taking 3rd party abstracts of publisher content and using them against the publishers. this is actually even worse than scraping directly because there is no way to opt out of Mahalo "borrowing" a publisher's content without the publisher also blocking Google from indexing it.
keep in mind all of your content is creative commons licensed...so if you keep up your scrape and nofollow attribution game, you are going to be in for some surprises where you feel the effects of what you are doing onto others.
your choice...either fix the nofollow anti-attribution issue yourself or have the market fix it for you.
so, i think you have the issue confused.
Also, on #1 I think most SEOs would say your wrong. More pages does NOT equal more page rank. It's the EXACT opposite.
MORE QUALITY PAGES and more QUALITY links = bette SEO from what the top SEOs have told me. I hope this helps with your site.
all the best,
Jason