You're better off getting two rooms, we just did 2 weeks in Japan staying in 5 different cities and all of their rooms are fairly small with exception to the ryokan (traditional japanese inn). One room was the smallest we've ever been in but their pricing can be lower than you'd get here. The small hotel room was about $50 or $60 and here in the U.S. that would probably fall along a hotel or motel you would not want to stay in. It was just my husband and I so a family would be harder.
Be prepared for extremely hard beds too, while our Hilton by Disney was the least I would say hard it was still much harder in our opinions compared to here.
In a nutshell their lower occupancy is a blessing in disguise if you're talking about space because space is harder to come by there.