The US market is what we were referring to as small. And you are right; there are hundreds of Japanese games. Dozens come out every month. We get maybe 1? No, that’s probably an understatement. Given all the game makers there are probably close to 100 or so in a month.
As for why most of them are ADV … there are a number of reasons for that. Well, there really is one reason, but it’s governed by a number of factors.
Essentially it boils down to “ADVs are the simplest”. You can tell the kind of story you want to in an ADV, and they’re much easier to make than a SIM or an RPG of some sort.
Compounding this is the same issues that affect US localized ports. The b-game companies are subject to very very cutthroat competition. They are also all very small. Most of them aren’t in very strong financial condition. Putting out, say, an RPG is a big investment because it is comparatively more complicated than an ADV game. If this investment takes too many resources the company may never complete it and go under. Or if it does come out, it may not sell well enough to save the company.
Look up why Infocom collapsed and you will find essentially the same story. They were coming out with a completely new kind of product and it was a long involved mess to create. This caused the firm to lose profitability and they went under.