ie there a limit to the cross dressing in Japanese culture or is it always considered appropriate?
That's considered "entertainment" a lot of the time.
Kind of like "Uncle Milty" (Milton Berle) in the '50's, or Flip Wilson in the 70's...
Their entertainment culture also takes certain extreme people at the fringes of society, declares them "talents" (at least temporarily), and turns them into products. It's a schtick, not necessarily an acceptance into "normal" society.
Actually, not altogether different from the 1960's/70's here...
-Dave