Were the delta blues a popular genre around the 1920s-1930s such as jazz or was it a more underground genre? In comparison to other major labels at the time, how prominent was Paramount Records in the music industry?
Underground is not necessarily the right word. Delta blues was originally considered "race music" mainly meant for black audiences. In 1920 "Crazy Blues" by Mamie Smith was probably the first hit by black artists, performing black style music, that's popularity was based on its sale to a predominantly black audience. Here is a clip:
Not what you would considered Delta Blues, but its success led record labels to look for new acts that did not necessarily need to appeal to white audiences. One of the biggest blues artists in the 1920s was Blind Lemon Jefferson. But he was not a Delta artist either. He was the King of the Texas Blues. His "Long Lonesome Blues" sold in the six figures, which was an impressive number for any genre at the time. Here is a clip:
Another relatively popular song was "Diddie Wa Diddie" by Blind Blake. People aren't quite sure where he is from, but he was not from the Delta. Here is a clip:
So I have yet to refer to a successful blues artist from the Delta region in the time period that you referenced. You are probably thinking of names like Robert Johnson, Son House, Leadbelly, and the sorts. Son House only recorded a few songs only to be re-discovered later after working with Alan Lomax. Leadbelly had limited commercial success. As for Robert Johnson, the only real "hit" that he had while ha was alive was "Terraplane Blues" which only sold about 5,000 copies. Here is a clip:
So, I really have not addressed your question yet. During this time period, white audiences were not traveling up to Harlem to see Blues artists in the same way that they were doing with Jazz Clubs. These artists were mainly performing for black audiences. To put it in perspective, the first really integrated blues club in Chicago, Big John's, only opened in 1963. Before that, if you were white and you were watching a blues act, you were probably at a folk festival.
Paramount, which I am not sure if you are aware, started as a side project of a furniture company, was by far the most prominent "race label." The problem is that they sucked at keeping records--not in the music sense. They were definitely successful while in operation, with annual sales of around $100,000--of which very little went to the artists--but they, along with the blues in general were destroyed. Y the Great Depression. As I am sure that you know, if you are familiar with Paramount Records, Delta music did not really become popular until the Delta artists spread to the big cities, like Muddy Waters in Chicago and gave us new takes on Delta music, Folk Festivals opened this music up to white audiences, the re-issue of Robert Johnson's King of the Delta blues in the late 50s, and of course when the British bands discovered them.
Further reading/listening:
(If you are looking for a Christmas present) http://thirdmanstore.com/the-rise-and-fall-of-paramount-records-1917-1932-volume-1
Delta Blues by Ted Gioia
Deep Blues by Robert Palmer