If that's true, then why are there almost no AO rated games? You'd think those would be even more profitable.
Simply because there aren't any stores in North America that would want to sell any such game. At least none that I know of.

I wouldn't say that an "M" rating alone makes an automatic best seller; GTA and Halo sell because in the opinions of many, they're just good games. However, I do believe that M rated games do get points due to the whole forbidden fruit-ness of what comes with that rating. In other words, GTA will get someone's attention faster than say, Katamari Damacy just because of the rating and controversy surrounding it.