I completely agree with your assessment and I was in the same boat where I wanted to live there despite all of that.

And while I do believe that having a more open immigration policy may be beneficial (it's practically the cheat code for declining populations), I genuinely believe they would do much more if they focused on strengthening their social safety net (unemployment, parental leaves), cracking down on the toxic work cultures (much more aggressively, not in the current way, where they favor employers over employees and use social shame for everything, although that's Japanese culture in a sense ...), and making family minded policies (massive tax breaks or direct aid for children)