I was wondering if it possible to have a \newcommand whose name is made up
of the argument of an outer \newcommand.
Sure, this is the basic reason for \csname.
\def\makecmd#1{\expandafter\def\csname#1\endcsname{body}}
\makecmd{foo} then defines \foo to expand to "body".
(If you like \newcommand then add appropriate syntactic sugar.)