Yes, and yes. Some of these singers could have a hit singing the phone book, and some of these songs would be hits with tin cans and rubber bands.
Also, instrumentalists who can break outside their usual territory with compelling playing. When the rhythm guitar solos, the bass and drums may step it up a bit to cover. And if the rhythm guitar player can solo well, you almost don't notice the absence of rhythm guitar. Bass and drums can write signature parts that literally define the song.
It's a combination of busy and conservative playing, and knowing when it's time for which. Successful trio players have a heightened sense of awareness, timing, and good taste. A lot of successful trios are not made up of virtuosos, just competent and creative, smart musicians. You can bet that when they rehearse, they are really communicating about what they think is working, and what sounds thin, bad, or wrong, and making adjustments and corrections along the way. Some have one main arranger, and some depend on all three taking turns critiquing and arranging.