It's an integrated GPU so increasing the RAM will increase the VRAM. This will only apply to a certain point, depending on how much RAM you currently have and what operating system you have, as it may already be maxed.
However:
1) You cannot upgrade the RAM on your model of Mac.
2) Even if you could, increasing the VRAM for your GPU will have an infinitesimal impact on games performance. If it doesn't run smoothly now, it won't after increasing VRAM. Certainly nothing noticeable in real-world performance.
3) Upgrading the HDD to an SSD would have a noticeable performance benefit for gaming in loading times, but for graphical intensive games, the GPU will still be the bottleneck.
4) If you need to play some seriously intensive graphical games, the only option beyond a console/gaming PC would be an external GPU.