I go the manual route as well. Did try a couple psuedo-automatic link exchanges, and they really don’t work out. I check backlinks on a regular basis to make sure others haven’t taken them down or gotten themselves banned. Most link exchanges stay up thankfully, maybe 2% go bad for one reason or another.
As for your question on if links help in the SERPs, they most certainly do. The trick however is finding the most valuable links as one very strong link can do as much as 100 very weak links, but those 100 weak links do count as well.