I have only been playing out for the late 6-7 years, but I will offer my thoughts on the subject, which you my find helpful or rubbish - either way, I am not offended.
Which brings me to my first point: My philosphy is that performing has nothing to do with the performer - it is all about the audience. Whether playing a concert where the audience is seated in rapt attention or in a noisy pub, it is their time. Now, it is up to the performer to make sure the audience is getting what they want. Read the room. If it is filled with people dining or enjoying a drink and conversation with friends, the music should support that - atmosphere, if you will. If it is friday night and people want to let loose a bit, then putting the music more up front makes sense (and up beat, too). Be advised that sometimes one's style of music is simply not a fit for whatever is going on, in which case, get through the gig as best you can, get paid, and go off to look for other venues. In most instances though, you will find, as leadfingers said, anything from a tapping foot to a full on boogie...play to those people until the rest get it.
Leave your ego at home. I am bewildered when I see a performer get all pissed off when the people they are playing for don't fall down and absolutely love the music. I could easily create a list of hundreds, if not thousands, of musicians I would not really care to see. I think everyone does. So if I am on someone's list, so be it.
You mentioned having difficulty grabbing listeners' attention. I cannot tell how many times I see simply wonderful musicians bore an audience to death. They seem to be playing simply for their own enjoyment...sometimes even doing a bit of navel gazing along the way. While there is usually some (or a lot) in an audience who are simply transfixed by a performer, very often people do not want to have to work too hard to get the music. Go to a classical concert by highly rated performers, and I will almost guarantee you will see people nodding off. Make your music fun and you will get the audience everytime - that does not mean a whole show of novelty songs - it means make sure your audience knows that you are having fun...they will automatically jump on board.
Material. I can assure you, I do no Jimmy Buffet songs (I think he is great, but Jimmy Buffet is Jimmy Buffet). Same with James Taylor, CCR, on and on. Sometimes at a lively open mic that I visit the same song is done by multiple performers (Think Dead Flowers - a simply wonderful song done to death). Of course you could change the songs up a bit and make them something new, but I believe that people really want to hear Mick Jagger doing a Stones cover - not DW. So what do I do? I do lots of stuff with a real solid 2 and 4 that many have not heard before, or only occasionally. This is due in large part to the fact that I lack the chops and voice to imitate the original - plus I am too lazy to learn it note for note. I do alot of Randy Newman - but not Short People. I do some Tom Waits. Lots of old blues. Maybe some Dave Van Ronk-style stuff. I occasionally pull out something like Singing On a Star, which everyone on earth knows, but never hear in a bar...they all sing along. Sometimes I even do old spirituals like Hush, Somebody's Callin' My Name or Jesus on the Mainline. People never expect to hear those in a bar. (I usually say something like, "This concludes the religious portion of the show." after singing one of those.)
Dare to be different, but not so different that people don't know what the hell you are doing! Put everything you've got into each song, even in a quiet setting - it doesn't have to be loud. And one final tip, make really funny faces - grimaces, if you will, when you sing. People love that!