Defining a custom newcommand-like command

Question

For a package I'm writing, I would like to provide a customised way to create a new command. The idea is that the user will write something like

\DeclareFancyThing{\myfancything}{parameter1}{parameter2}

and then this will create a command \myfancything, which itself takes an argument or two.

I was pleased and surprised to find that the following MWE does actually work, and produces the words "fancy foo!" as expected:

\documentclass{article}
\newcommand{\mynewcommand}[2]{%
    \newcommand{#1}{fancy #2!}%
}
\mynewcommand{\foo}{foo}
\begin{document}
\foo
\end{document}

However, I can't work out how to make it so that the generated command \foo itself takes an argument. Is there a way to do that?

The following might be expected to produce the words "fancy foo (bar)!", but it in fact gives the error "TeX capacity exceeded, sorry [input stack size=10000]."

\documentclass{article}
\newcommand{\mynewcommand}[2]{%
    \newcommand{#1}[1]{fancy #2 (#1)!}%
}
\mynewcommand{\foo}{foo}
\begin{document}
\foo{bar}
\end{document}

I guess the issue is that the #1 refers to the first argument of \mynewcommand instead of the argument of \foo, but I don't know how to change that.

Edit: The question is rightly closed, so I can't post an answer - but in order to help future visitors, in case the comments get deleted, the following works fine and produces "fancy foo (bar)!".

\documentclass{article}
\newcommand{\mynewcommand}[2]{%
    \newcommand{#1}[1]{fancy #2 (##1)!}%
}
\mynewcommand{\foo}{foo}
\begin{document}
\foo{bar}
\end{document}