This is interesting, so I'll give my own answers, too.
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"When the guest/stranger is Japanese."
1. Is using simple, polite gesture, together with polite words, considered acceptable in Japanese culture in general?
Depends on what gestures you're talking about. :blush:
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"A Japanese person meets a foreigner (US citizen, American, European, African, Asian, Australian) as total stangers on the street or in a shop."
2. What is the standard way for a Japanese person to greet the stranger who looks like a foreigner?
What are the first things to say/do to the foreigner?
I don't know what's standard, but a short greeting in Japanese followed by observation of reaction of the foreign person. Personally, I think reaction on the part of the Japanese depends on how the person feels about his/her English language ability. Most people have no confidence and react strangely, even from my point of view--such as speaking in Japanese only, leaving the location altogether to seek help, etc. I think the people living in the "shitamachi" area are more tolerant and confident of themselves, regardless of English skill level, and will speak to a foreigner in Japanese regardless of whether the person understands them or not.
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3. Do many Japanese think that speaking Japanese to a foreigner is impolite?
No. The need to speak English to a foreign-looking person is imprinted in the minds of the Japanese through education, with teachers imparting this belief.
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4. Do many Japanese think that asking a foreigner's Japanese ability is rude?
Depends on how you met the person, I guess.
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5. Is it emabrassing for a Japanese to say, "I cannot speak English."
Yes, embarrassing, but they do it to escape what they think is humiliation of not being able to speak English.
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6. Do many Japanese think that a foreigner will be embarassed to say, "I cannot speak Japanese" ?
No, I think the number of Japanese-speaking foreigners is not large enough for the Japanese in general to think that there are in fact foreigners who speak Japanese well.
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7. Do many Japanese wish to practice English with an English speaking person?
Yes, VERY, VERY MUCH!!
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8. Do many Japanese think that the Japanese language is unique, and difficult to learn for Japanese themselves? (speech, reading, writing, etc.)
Many say so, but that claim is for self-justification (the other side of not being able to speak English) and theories on linguistic uniqueness propounded in the past.
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9. Do many Japanese think that a foreigner (Mongoloid, Negroid, Caucasian,) speaking Japanese is bad, unusual, surprising, suspicious, or intimidating?
Yes, it's still unusual and surprising.
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10. Is complementing on someone's skill in anything (including language) considered okay when you it many times?
Once is enough! But, people (especially the elderly) who are really impressed would say it many tiimes.
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11. Is complementing someone many times ever considered rude or sarcastic?
Depends on the situation, as mentioned in #10. I think most don't have malicious intentions--only sense of inferiority, backwardness, and lack of awareness that Westerners, especially Europeans, have toward the cultures and languages around the world.
Maybe I'm not typically Japanese, but I think I speak for many Japanese (at least the ones I know).