... She said she visited a few homes of senior managers with the wives showing off their temporary baby girls as if the girls were their own young children ....
My family and I lived in Japan for three years in the 1980's. Japanese are very social but generally do not invite others into their homes unless they are relatively close personal friends or family. Especially true for foreigners. Business aquaintenances/associates/friends meet at company facilities for business and in public places such as bars, at festivals or parks, etc. for socializing. My experiences were that Japanese are much more polite than almost any Euro-centric people, but are more protective of their private lives. Not saying your friend's experience was as described, but based on my personal experience living there, I doubt its veracity.
As to the hotels, Japan is again unique in my experience. Love hotels do exist and clients can rent a room by the hour or longer. Rooms are decorated to enhance the visitors experience, but one must be careful if offended by certain practices. Although the desk clerk probably speaks, at least, rudimentary English, best to have a friend ask then explain the hotel's specialties. I would not be surprised if there are hotels that have areas set aside as nurseries for adult babies.
Funny story: Several months after moving to the Tokyo area, we noticed what looked almost as if it were a completely enclosed parking facility. Rates were listed outside on an oversized sign, but there were half a dozen rates listed in Yen, and all in Kanji (Japanese writing using Chinese characters). Monday morning I asked my female secretary why a parking garage had so many different prices. After a moment or two of discussion about where I'd seen the sign, she laughed and told me the building was NOT a garage, but a love hotel and the listings was, primarily, for the many "packages" the hotel offered. She laughed (often a sign of embarassment for self or others) and I blushed, but that was my introduction to Love Hotels.