Videogames and Art, pt. 2

I found an in this last week of readings which seem to address two questions I find interesting, though I'm sure my colleagues have discussed in greater depth.

The first chapter is "The Computer as a Dollhouse," which makes the claim that videogames serve as simply an extension of the games children play during their early years. It makes sense, given that a lot of the metaphors designers use in producing their avatars include many references to dolls and doll houses, such as "rag doll" physics. Additionally, the players play through scenarios, vicariously enjoying the experiences their avatars find themselves in, in much the same way boys and girls play Cowboys and Indians or House. The player is given a chance to experience something different, much like little girls play with their toy babies. No real earth-shattering statements here.

My questions are, in this brief statement:
1) In much the same way we addressed Homo lupens, is videogame play merely an extension of a fantasy realm?
2) Why does it matter that players are allowed to create a fully customizeable avatar in their game of choice? Is this a representation of themselves?