Thank you all for the responses.

I've been to Japan twice over new years... maybe the major attractions only close on 1/1, but I found so many of the small owned coffee shops, restaurants, etc. were closed through January 4th. Plus, that time just seemed very very quiet, even in Tokyo.

I understand it will be oppressively hot and humid during Obon. That's fine. I grew up in Florida and live in Houston. I prefer HOT AND HUMID. ^