There are a great many books in the romance category. They are even on the bestseller lists. This isn't really surprising if you think about it. Romance, perhaps more than most genres is about the reader almost as much as it is about the characters.
In a fantasy (which is ironic I know as we use that word far too often) it's more about the situation, it's about the characters and what's going on with them. In a romance yeah, the characters are important but you're appealing much more directly to the romantic sense of the person reading it. Not every romance will be for every romance reader and in many ways you have to sell the idea of what romance is to the reader. One of the reasons that Fifty Shades of Grey is likely so popular is because, despite the BDSM nature of the book, the author sells the concept to the readers. She convinces you that it's actually quite romantic by utilizing the concepts of not only romance, but of the relationship surrounding romance.
One of the best ways to 'sell' a romance to someone is by making rounded and believable characters that you can fall in love with. Usually the best ones are flawed and a part of the romance is not only loving those flaws but inspiring each other to improve beyond the flaws into a better person than you would have been without the person who inspired you. More so in romance than in any other category this kind of theme is explored. Which in many ways makes our obsession with women loving the "bad boy" and wanting to "change" their men, suddenly make sense.
Think about it, who better to inspire to be a better person than the 'bad boy with a past'? Someone who might have had something bad happen to them and then made bad choices as a result. He's not actually unlovable but he might think he is (or in some cases she's the bad girl who needs reform) because of his past. She provides the unending love that accepts him for who is his and what he's done and by doing so inspires him to be better. It's positive change in a positive way inspired by love and in so many ways this reflects the real world.
There's a dark side to this of course, there are those who don't want to change. Often the heroine in these kinds of novels gets pulled down into what he does because he doesn't want to change. He likes the darkness in who he is and doesn't really care if he's accepted or not and takes great pleasure in causing her to fall into disgrace with him, usually because he doesn't really think he can be redeemed. This theme or themes like them are often used with fantasy/romance mixes because it allowed the protagonist to be the one to see the light again and realize how they want to be independent of the other character (again, these actually work for males or females).
What I think really makes it a romance instead of a fantasy or a literary fiction style is how you're convincing the reader what is really romantic about the story and that the romance in the story is worth focusing on. Convince your reader of that and you can do pretty much whatever you want in terms of 'romance'. Just because that purple alien is a weird size and has a tube for a mouth doesn't mean he (or she) isn't worth loving, but you're going to have to work dang hard to convince me that me as a human would want to have anything to do with it in a romantic (or sexual) sense. And though romance often verges into the realms of what really should be erotica (add sexual descriptions and technically you've already wandered into that realm), if the feelings are there and presented well enough because you've set up the situation and wooed your reader into the romance the characters are feeling (read two purple aliens with tubes instead of mouths instead of making one a human for instance, the characters can understand each other and I can disbelieve that I'm not a purple alien for long enough to enjoy it), and into the world those characters are a part of and you've got a believable romance.
You've got to remember that a believable story isn't about things that actually happened. In romance stories more than most. It's about presenting those things in a way that is believable to the reader. If you've ever had someone go 'that could never really happen' to something you've written directly from life you'll know what i"m talking about. (Happens more frequently than most people would expect, guess it's best not to write what you know in every sense...) So plan your romances, make them believable and stretch the foundations of what we will believe by doing something different but by drawing the reader into it. There's few better ways that I can think of to draw a reader in and really make them believe that the romance you're selling them is one they want to buy.