The name "live-ball era" comes from the dramatic rise in offensive statistics, a direct result of a series of rule changes (introduced in 1920) that were colloquially said to have made the ball more "lively".
Furthermore, the physical wear on the ball reduced its elasticity as the game progressed, making it increasingly difficult to hit for distance.
With the introduction of the foul-strike rule, the batter had to let many more pitches "go" without being swung on, dramatically reducing the total number of hits.
Aiding in Ruth's success was that he held the bat lower and swung with an uppercut, essentially trying to hit home runs.
Seeing his success (and his popularity that followed), young players who debuted in the 1920s, including Lou Gehrig and Mel Ott, followed Ruth's example.
While the rule changes instituted in 1920 were a major factor in the increased scoring and number of home runs seen in Major League Baseball, established sluggers who had been successful prior to 1920 (including Sisler, Ty Cobb and Tris Speaker) were able to maintain their previous successful hitting styles into the 1920s.