you cant see past 24 fps (human natural eye register), but it makes a difference to fast moving objects ... lower fps will make things skip across your screen, so naturally gamers want the highest possible so no skiping occurs. especially useful when youre playing first person shooters and turning on the spot, you dont want your surroundings skipping past you, you might miss an enemy.
vram is where all the data for the display is held. the more of it, the faster it can be displayed and in higher resolution (speed comes form not having to cache from ram/page).
think about 256 colours ... its not gonna take much vram for that, what about 16 million colours ... gonna take more right.
same with textures, a flat smooth surface like a...