We have started using the additional name fields to have kanji, hiragana and romaji and we put the student number in the "optional student id field" for every student. It seems to be going okay, but the way names are presented for different activities and in different parts of Moodle doesn't seem consistent. Sometimes you will see the kanji and hiragana and at other times all three sets of names and the id number.
This is how I have the "full name format" lastname firstname (lastnamephonetic firstnamephonetic) (alternatename)
and for "Show user identy" I only have ID number selected.
On the "Language Settings" page I have the "Default Language" set to Japanese.
How are other people using this feature? Is it working the way you had envisioned it? Is there any tweaking that we need to ask Moodle HQ to do?