In answer to OP question: Nope for the first question and for me yes, but some peoples enjoyment of a game might come out of awesome graphics (I'm pointing to the butload of PS3 fanboys that have to label every new PS3 exclusive the best graphics of this gen).
With Question 1, I think the age of downloading games online really saved alot of potentially niche/quirky games and we'll see even more "niche" titles then we have last generation because small developers can now produce a 4-5 hour game and distribute it with having to produce discs (I recently played castle crashers and that game only lasts 4-5 hours, but it only costed $15). Also, games sold at retail in discs don't always need to push boundaries graphics wise to look good, look at Prince of Persia, it is hardly a super high res textures zomg marvel but it's artistic style sure as hell looked better than nearly all that came out last year.
Of course the most well known games will be the super heavy weight graphics games, but that's pretty much the same as last gen (Halo, God of War, Gran Turismo, MGS3 etc).
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