In other words, was it really only a show (https://web.archive.org/web/20061031125335/http://www.jumptheshark.com/a/alice.htm) people watched because of the other shows around it?

It was paired with All in the Family (https://web.archive.org/web/20140331140354/http://forums.televisionwithoutpity.com/topic/2661255-all-in-the-family/?view=getnewpost)/Archie Bunker's Place and The Jeffersons (https://web.archive.org/web/20140402220152/http://forums.televisionwithoutpity.com/topic/3059003-the-jeffersons-were-moving-on-up/?view=getnewpost) for most of its run.

In the sixth season (http://www.tvtango.com/series/alice_1976/episodes?page=3) (after coming in #5 for Season 5), CBS must've figured the show (https://web.archive.org/web/20140405003316/http://forums.televisionwithoutpity.com/topic/3001138-alice-kiss-flos-grits/?view=getnewpost) might have a following of its own and moved it to Wednesdays to be the tentpole of that night.

The show dropped to the bottom of the ratings, coming in third to The Facts of Life (https://web.archive.org/web/20140330010016/http://forums.televisionwithoutpity.com/topic/2625067-the-facts-of-life/?view=getnewpost) and The Fall Guy (https://web.archive.org/web/20061031125219/http://www.jumptheshark.com/f/fallguy.htm). CBS moved it back to Sunday, where they got two more seasons out of it.

I wouldnt say so because if a show is BAD i dont care what airs around it lol For example, on Antenna TV I didnt like how Barney Miller was in between Three's Company and the Jeffersons and would turn to another channel for 30 mins.

The show probably lost viewers after Flo left

I think so.

There is a lot of shows that just stayed on the air a long timebecause it made good enough ratings. Alice is a good example of this. But Alice was put in the 8:00/9:00 slot which has to pull in the ratings more to get people to watch the 8:30/9:00 pm show.

I agree that the show suffered after Flo left.

Alice was a great show. I dont think its success had anything to do with pairings. By the time Alice came around, All In The Family was stale with the Stivics moving next door and then to CA.
Alice hung around a little too long but even in some of its last seasons, it had a few really good episodes. They were the exception and not the rule by the time the early 80s came along.

Alice had some low-rated shows around it. It had The Blue Knight as lead-out in its first season and Kaz in its third, both one-season wonders.

Alice is an example of how memory plays tricks on you. In my mind, it's always a Wednesdays at 9:30 show with One Day at a Time as a lead-in. But in reality, it only had that time slot in the first season and ODaaT was not on Wednesdays that year.