A) 2-3 year development cycles for a RACING GAME where you have a lot of the car physics and so on figured out already is still a bit nuts. Microsoft brings out a Forza every year and development of these games should be fantastically scalable.
B) That's because the name is still one of the biggest ones in the industry and is always being marketed heavily by Sony. If they keep the GT5 development cycles up (which would be the case if GT7 releases in 2018 / 2019), the name will slowly degrade in value, so Sony definitely needs to get Polyphony back on track in terms of releasing games that don't take 5-6 years to develop.
You know Forza is made by two different developers right? Turn 10 works on a two year schedule on the main games and Playground makes the Horizon games.
It's certainly not possible to keep that level of quality for even a racing game with one developer making them every year.
With the exception of sports games, there are pretty much no series developed on 1 year cycles. Call of Duty is developed by three different teams, Ass Creed is developed by multiple studios across Ubisoft , as posted above.
GT5 sold pretty damn well after a gap, so I'll say you're wrong on that too. The biggest threat to the GT brand is making poor games, not making good games slowly. I'd (and apparently Sony agrees) much rather Polyphony take their time to do it right than rush out games.