Have a look into some of the papers put out in response to the Pascal challenge in recent years. The impression they seem to give me is that standard 'feature detection' methods don't work very well with the Bag of Words technique. This makes sense when you think about it - BoW works by pulling together lots of weak, often unrelated features. It's less about detecting a specific object, but instead recognizing classes of objects and scenes. As such, putting too much emphasis on normal 'key features' can harm more than help.
As such, we see folks using dense grids and even random points as their features. From experience, using one of these methods over Harris corners, LoG, SIFT, MSER, or any of the like, has a great positive impact on performance.
To answer your questions directly:
Yes. From the SIFT api:
Keypoints are further refined by eliminating those that are likely to be unstable, either because they are selected nearby an image edge, rather than an image blob, or are found on image structures with low contrast. Filtering is controlled by the follow:
Peak threshold. This is the minimum amount of contrast to accept a keypoint. It is set by configuring the SIFT filter object by vl_sift_set_peak_thresh().
Edge threshold. This is the edge rejection threshold. It is set by configuring the SIFT filter object by vl_sift_set_edge_thresh().You can see examples of the two thresholds in action in the 'Detector parameters' section here.
Research suggests features densely selected from the scene yield more descriptive 'words' than those selected using more 'intelligent' methods (eg: SIFT, Harris, MSER). Try your Bag of Words pipeline with vl_feat's DSIFT or PHOW implementation. You should see a great improvement in performance (assuming your 'word' selection and classification steps are tuned well).
After a dense set of feature points, the biggest breakthrough in this field seems to have been the 'Spatial Pyramid' approach. This increases the number of words produced for an image, but provides a location aspect to the features - something inherently lacking in Bag of Words. After that, make sure your parameters are well tuned (which feature descriptor you're using (SIFT, HOG, SURF, etc), how many words are in your vocabulary, what classifier are you using ect.) Then.. you're in active research land. Enjoy =)