Let me point out two point between this point you make and the last point you make.
1.) You said in your last point.
But in this post, you said China won't and don't need to conquer Japan, and the main battle ground is SCS and its island, if this is the case, then why would Japanese have to surrender if they want to survive their race as you said? A battle in South China Seas will not make Japanese extinct, unless of course everyone in Japan swam to SCS and fight the Chinese.
2.) Why would Japanese need to fight a war in South China Seas in the first place? They have no strategic interest in it, nor do they need to reach that far to touch China and Chinese Air Force or Navy.
The problem for you again, is that you have simplified the whole battle scenario and willingly think your enemy will follow your move. if the battle ground is in SCS, the only thing Japan need to do is to close off the top part of the japanese home island and do not allow the Chinese to get in, and if the China want t fight the Japanese, The Japanese will probably wait til the Chinese steam up and fight in their turf in japan sea or East China Sea. For which they can bring the combinaton of land, air and sea power on the Chinese.
In a strategic sense, there are no urge for Japanese to start any battle, they are smaller than the Chinese and they don't need to start the battle, let the Chinese take the initiative and engage Japan with the location of their choosing.
And no, even if US is to engage on the Japanese side in the SCS situation (which is odd to have a war in SCS with Japan to begin with) the US will not get into the SCS island chain, they will simply support the Japanese and hold off both Philippine Seas and Japan Seas together, when China can get nothing in and out, they would have to attack, instead of Japan. and since Japan is outside of China, and face an open oceans, China can never blockade Japan, but a combination of JPN and US force, on the other hand, can blockade the Chinese with a choke hold of Japan Seas and Philippine Seas, and it will force China to fight in a 2 pronge war. If US got involved in the SCS with Japan, China cannot win a 2 pronge war with Japan and US seperately.
The article is about a War between China and Japan in East China seas not South China seas, and to engage the Japanese in East China Seas, the Chinese MUST Attack and hold the surrounding Island or else they will pay a high price on winning a war with the Japanese, and that is the reason why I said what I said before. Eventually the China will win a battle in East China Seas, but how much of their ships and aircraft have to lose before it can reach that target is another matter, the same reason why China did not attack and recapture Taiwan for now.