Okay then. Name a single algorithm that could look at any piece of information and quantify its credibility and quality.
You can't, because it does not exist. You don't need a PhD or time at the Googleplex to know that.
No, they don't. Anyone that has worked in SEO before targets backlinks because they are proven to work. The reason people say content is king is because they don't want to push people towards spamming.
To prove my point; how would you promote an image only website? The only content is images, so how can Google judge this content?
How do they do this? They can do it through Google Analytics, but not everyone uses that. Can you prove that Google uses their analytics script in their rankings?
Also, how does staying on a page for a long time make it a good page? I know many great pages that require very little time, and some crappy pages that will use up minutes of my time.
That's a very narrow-minded view of quality, and I seriously doubt that the engineers at Google would view the Internet in such a way.