By the Nara and Heian periods, Buddhism had definitely reached all levels of society. In general you would find three levels of Buddhism: Official urban buddhist schools like Tendai and Shingon, Mountain ascetic/magical practice and I think what you could call "Popular Buddhism".

One characteristic of pre-Kamakura Buddhism is that the Government made an effort to tightly control it with a top down approach. In "A Cultural History of Japanese Buddhism" by William E. Deal, he states:

The intention was to try to ensure that monks and nuns received proper training, but it was also a way for the state to maintain control over the monastic community. In 689, for instance, an edict was issued requiring the permission of the ruler in order for one to take Buddhist vows and join a monastic community. Even the appearance of monastics was micromanaged by the state: the Nihon shoki reports a 679 edict in which King Tenmu prescribed regulations concerning the monastic garb of monks and nuns, including the color of the robes. Additionally, measures were set in place to ensure state control over Buddhist temples, especially those built by powerful aristocratic families. State control of the temples meant, in effect, control over competing aristocratic interests.

One way the Government tried to control Buddhism was that there were very specific rules against preaching Buddhism popularly "in the streets". My experience in studying history in general is that when you see a government repeatedly issue a proclamation its a sign that its injunctions are being at least somewhat ignored.

One example of this dynamic was the Priest Gyoki (668-749) who is described as being a "charismatic preacher". At first his teaching was illegal but he became so popular that government officials were essentially forced to authorize his activities. He and his disciples would roam the countryside not only preaching a popular form of Buddhism but they also built temples that would become the primary community centers of their region. These monks would also help the poor and organize public work projects like roads, bridges, wells, reservoirs, etc. Additionally they built many temple-hospitals that offered health care to those who would not otherwise have good access to it.

Gyoki and his followers were also influential that they were the first Japanese to engage in widespread map making which obviously was a huge contribution to Japanese culture.

By this era the syncretism of Buddhism and Shinto was well underway. Temples would have Shinto altars and sometimes even Shinto priests. This provided a popular opportunity for those to come pray to receive assistance from spirits/gods.

sources:

• "A History of Japanese Buddhism" by Kenji Matsuo
• "The Japanese Transformation of Buddhism" by Royall Tyler. A paper in the book "Buddhist Spirituality". Edited by Takeuchi Yoshinori .
• "A Cultural History of Japanese Buddhism" by William E. Deal.