You seem to have a not-entirely uncommon experience for an American/European that spends an extended time in Japan. And to an extent what you say is true. But you seem to imply that there's some sort of drawn out conspiracy.

I actually had the fortune to take a class with one of the top Western scholars on Japanese political science. One of the readings in the class , which I highly recommend, was Avenell's "Making Japanese Citizens." In the book, he discusses the role of Japan's "shimin" (lit. citizen) and how a typical Japanese citizen's political activism grew through the post-WWII period, including the Security Treaty protests, anti-development and other reactionary protests, and the growth and development of the LDP. In the end, Japan's democracy is a very unique kind, which is only natural given Japan's much different culture and historical past.

To start with your points in order:

1. There is plenty of freedom of the press in Japan. FreedomHouse rated Japan's freedom of the press as 25 this year, compared to the US's 21 and the UK's 23. For comparison, South Korea is 32 and China is 84. The main source of tension comes down to the so-called press clubs which have been around for decades. These press clubs are an informal arrangement between the press and politicians where the press will gain easy access to the politicians on the condition that they refrain from asking certain sensitive questions. Although that is hardly to stop them from blasting corrupt politicians like this guy.

As for the school system, despite what you read in the news, most Japanese school children learn history as it more or less happened (for instance, they learn about Japanese atrocities in China, the aggression against the Allied powers, the nuclear bomb and the generous US efforts at reconstruction) and so-forth. Much like you may hear in the US about how certain school boards are trying to teach creationism and a certain view of history in schools, so do certain right-wing groups in Japan. They make the news, but ultimately play a minor role.

2. Are you familiar with the US institution of "Tammany Hall?" Crime and politics has long mixed in all democratic countries.

As for the LDP, the LDP has become the main power mostly because it has absorbed all the other parties' platforms. However, that does not mean there is one-party rule-the LDP itself has many factions that have different views, and there are constant power struggles between them-the 2000 ascension of Koizumi to the prime ministership being an example where the political disputes wiped out all the other main contenders, leaving a relative outsider at the top.

3. Japan's legal system has always been notoriously harsh on suspected criminals. This has partly to do with the fact that Japan's modernization with the Meiji Restoration was limited primarily to technology and political institutions. As much as I would like to avoid recommending my professors' books due to conflict of interest, he does a pretty good job in his "Cages of Reason: The Rise of the Rational State in France, Japan, the United States and Great Britain," where he uses the case studies of the US, France, Japan, and the UK, and trace the rise of their political institutions in a cultural and historical context.