I can believe that CTR has a significant impact, but how could traffic have an impact? Matt Cutts says explicitly that search doesn't touch any data from Analytics in any way: http://www.youtube.com/watch?v=CgBw9tbAQhU
"It's well known that traffic and SERP CTR has a significant impact on rankings."
We can see they're measuring it, it's obviously at least worth investigating as a signal, I'd be absolutely astounded if they aren't using it.
(I'm also a little surprised at Matt's continued insistence that the search team don't use CTR data from the Adwords and/or Analytics teams data. As a user-of-search, I'd like them to use _all_ available signals, and I suspect the Google Analytics data contains information which would noticeably improve the quality of search results).
Plus it's incredibly easy to rig google analytics data, you can just modify the GA javascript you're serving.
Traffic (and Analytics data) absolutely has an effect on your rankings. As mentioned above, it's part of the QDF effect