Miak, by the looks of thing's, I'll be heading off to Osaka University in a couple of months for an exchange program. I have a choice between 1 semester, 1 year (2 semesters) or 2 years (4 semesters). I've decided on the 1 year.
To be honest with you, it wasn't difficult for me to get accepted at all. I even got accepted to Tokyo University (ranked 1st in Japan) just by a simple recommendation from my university. But unfortunately, an exchange agreement will no longer exists with my university after this year for Tokyo.
As for the financial situation, exchange programs will generally be a lot cheaper because the tuition fees will be paid in your home university (this being usually the most expensive part about university).
I think that the estimates you've made or you've found are not that accurate or have been made so that you are VERY safe. For example;
B. Living Cost, Utilities, Travel Expenses 500-600$
For me, this cost will be 0$ unless I decide to go into town or travel to other cities etc, but even then, it certainly will not cost that much per month!
As you've done research already on Osaka, I'm sure you've seen this already, but I'll give it to you anyway. Check you OUSSEP
OUSSEP HomePage | Calendar
They have a very informative guide to everything and anything to do with exchange programs. I will be doing the program called "Independent Study". This will allow me to study what I need for my degree AND I will also be having language lessons. Which means that I will not be wasting one year by studying things that have nothing to do with my degree.
You also mentioned that foreign students in English speaking countries generally have a poor level of english, but you must understand that the situation is very different to Japan. In English speaking countries like England, they will generally take foreign students because they bring a lot of money to the university. This always helps in their decision making. People might disagree with me about this, but it is fact that many of the foreign students are only accepted due to money. This can easily be seen by the failure rate for foreign students in the first year of undergraduate studies (but of course, this doesn't mean that no foreigners pass, in fact, in post graduate studies, they are generally far superior).
In Japan, I highly doubt it is similar because from what I know, foreigners and Japanese pay the same tuition fees, where as in the US or England, tuition fees for a foreigner can be up to 5 times more expensive! eg, Where I would pay £3,000pa in england for any course I want, a foreigner could pay anything above £11,000pa depending on the course.