"Where should my marketing team focus resources -- bring traffic? Or convert it at a higher rate? I'd do both, but we cannot focus on everything at once :(" That's why this question is so important. It pops up in marketers heads so often.
First you should bring more traffic to your site. More traffic = more opportunities to hit a conversion. Right? Right!
Sign up, sold product, downloaded white paper -- whatever is your conversion. You need people on your site to get your business going.
Sooner or later your focus on traffic generation will get smaller return on investment. Simply because there will be less and less high quality traffic that's new for you. It happens often especially in a smaller niche or if you're running a local business.
So you should bring traffic to your site. As long as it makes sense.
But you may want more than just to get your business going. You need your business to be successful. That's where higher conversion rate makes sense :)
When you have decent traffic on your site, you can focus on conversion rate.
Many conversion rate optimization activities are even not possible without enough traffic. Take AB testing. You can hardly run a meaningful test, if your site has less than 10,000 unique visitors per month.