You're pretty much right. The margin between your CASM and your revenue per available seat mile (RASM) is your yield. What airline market planners and yield managers spend all their time doing is trying to figure out how to get the most revenue out of a passenger for a seat while keeping the cost of that seat to a minimum. There isn't an easy answer to your question because the travelling public is a fickle creature. They want the cheapest ticket, they don't want to fly props, they want non-stops from every podunk airport out there, etc etc. In general yes, you want to minimize cost and maximize revenue for every seat sold and you should make money. But whos to say if and how much business you'll lose because you fly a "smelly, noisey, old prop 'plane"?

Load factor is important in context. You'll hear people talk about break even load factor and thats the number that matters. It basically is the number of seats I need to fill at my current CASM and RASM to cover the cost of the flight. Remember Independence Air? I remember reading a business plan that said their break even load factor was around 106% with all those RJs. That means they needed to fill 53 seats on every one of their 50 seat RJs to break even to say nothing of turning a profit. You don't need to know anything about economics to know that won't fly! The reason that number was so big was that their costs were spread among relatively few seats (high CASM) and the fares in the markets they were serving were suppressed due to saturation from UAL, DAL and US Airways (low RASM). Theres a reason there aren't low cost/low fare carriers out there operating RJs.