The small unit sizes may or may not be ideal gameplay-wise, but Japan was actually pretty populous at this time. There were around 20 million people on the islands, about as many as there were in France at the same time (modern Japan is twice as populous as modern France). Late armies routinely numbered in the tens of thousands (~25,000 in the Imagawa army at Okehazama, ~40,000 Oda/Tokugawa troops at Nagashino, ~80,000 on each side at Sekigahara, ~150,000 in Hideyoshi's invasions of Korea).