Second question first. Is there any chance that a business that devotes itself strictly to comedy games could have any amount of success? I'm not talking about having one of my games on the Wal-Mart/Target/Staples shelves next to Command and Conquer, GTA, and the like. I mean shareware and locally (possibly regional) distribution in small computer/software stores (privately owned, not franchise), where success is when the business supplements income from a "day job" instead of detracting from it. Also, if the business has a cornball name like "Possum Holler Games" (assuming Possum Holler isn't already a registered business name) does that limit the type of games I'd be able to produce? Admittedly, the three I have in the works now are comical, but with a name like that would it be possible to branch out and do sci-fi games or fantasy RPGs and be taken seriously?

Well, you are thinking of niche marketing, and that is a positive. In terms of entertainment value, it would be wise to remember that in show business *other* that games, "comedy is king and it pays cash."

I think you have a good idea, and, I would explore it more if I were you.

With respect to naming, naming is branding and branding is perception, so put "comedy" and "games" up on the wall, start opening the thesaurus like most ppl do, and see where you can take the naming as a function of perception creation, which is at the heart of branding, marketing and advertising. It is also true that should you eventually become a company, the publicly branded name of your company might not bear any resemblance to the name your company is legally registered to do business with, and if fact, it is common practice.

Adventuredesign

Consider using a naming agency, such as Igor International.

Igor International: Igor Naming Guide

I would recommend my company but we don't do naming.

The Monkey Island adventure game serries,
focused primarily around comedy.

and it seemed to do very well (for it's time),
so I would say it's worth a shot