I'm not sure of your intentions, since your OP title asks a question which the OP content then answers, yet to neutralize that problem, I will respond in the negative. No, Japan is not overcrowed in the comparative sense. Japan is crowded, yes, but not to the degree of being 'over.'
The other questions you posed, especially the third one, are moot. The world is ever entangling itself into one whole, more and more...and may continue (and should, actually, in my opinion) to do so.
There is no need to concern ourselves with isolationistic overtones regarding Japan on the international market.
I moved this here since it was not really about Japanese politics.