I see this more often with Flex tickets. I haven't really seen the price go down though ...

My empirical observation of the "Only # seats" message is that there are only # seats available in a particular fare bucket.

More specifically, as an example, if I see the "only 3 seats" message, click the fare, then hover over the "preview seat availability" link, the browser's status bar will show the fare bucket (e.g. G -- since i'm cheap and fly the cheapest Flex). If I punch in the same flight in a seat counter, I've typically seen the flight to be G3