The late Frank Muir and Denis Norden for years used to wind up a BBC radio programme "My Word" with punny stories like spaw's, improvised in response to a challenge. Here's a link to a collection of the stories.

The initrial quote is true enough about "funny"; I'm not so certain about "beauty". If the incident being recounted is where the beauty resides, very often the simpler the telling the better, and attempts to embellish it with beautiful language can interfere.