What's causing the blog posts to rank above the product pages? Better information? More in-depth photos? Reviews? More content in general? If it's any of these, then think about you can apply these positives to the product pages so people start sharing and linking to those more.

http://googlewebmastercentral.blogspot.co.uk/2009/11/pros-and-cons-of-watermarked-images.html

"Will Google rank an image differently just because it's watermarked?
Peter: Nope. The presence of a watermark doesn't itself cause an image to be ranked higher or lower."

Hi Andy,

I don't think there's anything wrong with having a deep footer with useful links to pages within your site, as long as they are there for the benefit of your visitors. With your example, I would personally look to move those links in to your main content area on the homepage, perhaps with a CSS/Javascript map of Italy that shows all the town locations as clickable links? That way you're still including those links from your homepage but in a more useful manner for the user.

Then if you wanted to keep the links on your inner content pages too, you could simply have a location dropdown box in your sidebar with the listings and a 'Go' button or similar.

My personal preference would probably be to just keep them to the map setup on the homepage, then perhaps introduce regional content pages with enlarged sections of the main map, so South Italy, North Italy, etc, etc.

Hope that helps in some way.
Greg