Besides the general question in the title,
I'm not sure that I'm up to the challenge of writing up a comprehensive analysis of the problem posed in the question, but I can at least post some links interesting on the FP vs. games front:
Jörg W. Mittag provides a number of interesting examples in this answer to a question on "real world" Haskell programming (with links to some interesting write-ups -- the Purely Functional Retrogames series is really worth a read).
In Clojure land, Phil Hagelberg has implemented a text-based adventure game for his PeepCode screencast on Clojure programming; the code is available on GitHub. Then there's Brian Carper's RPG project; no code publicly released yet and just that one post from a while ago (it looked very cool, though, so let's all come together to pressure Brian to continue ;-)). Finally, here's an example of a simple game using Penumbra (for some reason -- possibly unrelated to Clojure -- I couldn't get it to work, but may you will, plus there's a write-up attached).
As for simulations, studying ants.clj
is a great idea. Also, I remember seeing a series of SICP-based lectures from an introductory programming course at UC Berkeley (I think...?) available somewhere (90% it was on their YouTube channel); they've got three lectures on OOP in Scheme and I think they mention simulation as a domain providing good use cases for the approach. Note that I have a pretty vague memory of this one, so it's hard for me to say how useful it might be to you.