I agree with you 100% that "Friendship" is crescendo-like piece and is a parallel or counter-part to "You're the Top."
I think that the joke and the humor lies in that type of competition throughout the whole show. I also think that energy level will contribute to the fast-paced tempo of the story.
Another thing I want to throw at you; the characters in the show are not funny, in fact, they take themselves very seriously. The comedy lies in the situations they find themselves in.
I actually think Friendship isn't as interesting a song as You're The Top, but agreed, it does serve a similar function...I just wish that our version was similar to the 1963 version and involved Billy, Reno and Moonface! That would make it even more interesting to me, because then all three would be trying to "top" the other.
I also agree with you that SOME of the humor is derived from the situation...but not all. In fact, many of these characters are quite witty, and that is an aspect of "funny" that is not situational, but comes from within a character. "Friendship" is an example, where both characters are engaged in a game of wits, coming up with increasingly ridiculous scenarios (sawed in half, cannibal stew, etc). The humor derives not from what they have been choreographed to do, but from the spark that the two characters share, and the fun that they are having one-upping the other. I think that Janet and Pete will be up to the task.
Another thing: some of the characters are quite ridiculous--Mrs. Harcourt, for example, even if played by an actual woman, is practically a cartoon, and both Sir Evelyn and Moonface are parodies of the English gentleman and "Al Capone" style gangster that was so popular in those days.
However, I think what you were getting at is that the characters themselves take themselves very seriously. This is certainly true, and is an essential part of what makes something inherently "funny," I think. If we as the viewer gets a sense that the actor playing the role doesn't truly believe in the role that they're playing, or is just mugging his or her way through their scenes, it often tends to take some of our enjoyment away from things.
Another corollary of this: oftentimes, the actor has to be big enough to fill the shoes of the character they're playing. Gene Wilder, for example, is brilliant (and funny) in Young Frankenstein...Rogert Bart, on the other hand, doesn't truly seem comfortable in the role, on Broadway. The show suffers as a result.
The energy level has to be fast paced throughout this show, and as you'll see when I start blocking this, part of what I'll be doing is moving people on and off constantly. Practically every five minutes, there should be a different "look" to what's going on stage. That's going to be difficult to enforce, by the way, in Chartley. Given the tight space, the actors seem to get distracted easily. But if they lose their pace, that will start to drag down individual actors, and that would be deadly.
That's part of what I was sensing last night, hearing the duets. Billy and Reno and Billy and Moonface almost seemed to be losing "energy" through the song, and that started to bring the song down. I know it was getting late, but they constantly need to sound excited. I did notice that after you and I mentioned the crescendo, even though it had been mentioned before, that Reno and Moonie both seemed to be more animated right after that discussion, so perhaps reinforcing the thought through repition isn't a bad thing, after all!