Well I won't get into the whole games as art debate, I don't see toys as art, I don't see board games as art either. Instead I will focus more on games as serious entertainment, since art is too hard to properly define anyways either people are too broad, or too narrow in their definition.
If you are still going on about Paper Mario, I will give you my honest assessment of that series and see what you think of that. I try not to get too deep into some of this stuff because when you begin to reveal things about yourself people look at you differently. Of course a guy who enjoys Michael Bay films and Nintendo video games probably is already being judged anyways.
A Tale of Two Cities, man. So I ask you all- what is a game that has had an emotional impact on you, that may have changed your perception of video games? Maybe a title that made you reconsider the medium as something that was MORE than just purely enjoyable and perhaps emotionally fulfilling, or satisfying in another sense?
I can name a few video games that I have had an emotional experience with that made me think deeply about life and other stuff but they aren't the games you would expect.
The first time I played Harvest Moon A Wonderful Life for the Game Cube I not only fell in love with the Game Cube, literally I to this day have a strong emotional attachment to that machine, but I also realized that a person can enjoy simple things in life without having to listen to all the clutter and noise of our busy lives. Despite everything going on around me in my life during that time, whenever I sat down to play that game it wasn't just escapism, it was me entering another world, another state of mind. I think people are too quick to compare anything that has that affect on us to being like a drug, I spin it the other way having never done drugs. I see drugs as a way for someone who can't appreciate life for what it is as a means of artificially experiencing what other people can without the drug.
In a way I think that better translates to the experience of being sucked into a video game world and not just sharing in the experience but being a part of it, being there spiritually even if not literally.
I also felt this when I was playing Turrican on the Sega Genesis, Final Fantasy 7 on the original Playstation, Super Mario 64 on the Nintendo 64, Little Nemo Adventures in Slumberland on the NES, and most recently in Minecraft on the PS4. Escapism is a part of art but it is also being able to get into the mind of the artists and see what they saw, feel what they felt, experience what they experienced.
Literature is different to me though, so I might stray from the line of thinking you are expecting. I suppose coming from a more literary background, not just being a writer but also reading books and enjoying them far more than anything else in this world, I can say I consider art and literature to be two entirely different things. Similar in many ways but not quite the same. I would be more inclined to argue video games could be considered literary in a way more so than artistic, but if one were to interpret art as I do it would alter their reasoning. See people look at video games and they see the visuals and to many visual= art but I think of art not as strictly visual but it has to have emotion, it has to have meaning, and deep down it has to deal with life and death in some way. Video games do often have emotions, they do deal with life and death quite often but given the nature of video games and the abundance of "resurrections" possible I am inclined to dismiss the notion they actually deal with death rather they gloss over it or even outright dismiss it entirely, thus disqualifying them as art.
Not literature I consider to be narrative in any form, video games can have a narrative even if they lack the more strict definition of art. To me in order to be literary it must have a beginning, middle, and end, that is all. I cannot think of a single video game that does not qualify as this. I consider sports to be literary, I am a sports writer for a newspaper and I write my stories from the perspective of a narrative, the team I am covering is the protagonist, the opponent the antagonist, there is conflict and resolution, these can be found in literature and they can be found in video games, but I do not consider art to be literature, not saying literature cannot be art. It gets complicated but for the sake of simplicity suppose that you could consider a work of literature to also be a work of art but I cannot accept a work of art as a equal to a work of literature. You know like how all thumbs are fingers but not all fingers are thumbs. Well not that extreme but along those lines.
Video games that I DO consider art do exist but they are not the same ones I consider to be literature, if that makes sense. Maybe literature isn't the correct word, I don't know but let's stick with it for the time being.
Since this has past TL:DR territory I will end there and allow you an opportunity to absorb what I wrote and reply accordingly.