It’s pretty natural not to reserve seats on shinkansen, because you can find seats unless you are travelling at peak hours (and there are trains every 20 minutes or better)
The travel time to and from airport, and the baggage+security easily eats into the 1.5 hour savings. Same day fare on shinkansen remains constant, unlike 30k+ that flights demand.
On shinkansen, you have lots of leg room compared to LCC seats. There’s also enough space to move, talk and option to reconfigure the seats for a group of 4 or 6 travelers. There’s cell connectivity (and decent wifi onboard) so you don’t have to pay through your nose for in flight WiFi. The toilets are spacious. There’s dedicated place to talk on the phone. Less noisy and fewer bumps than a flight.
This makes the bullet trains really attractive for business and family travels (with kids). You don’t need to plan beforehand and there’s less inconvenience compared to flight. Moreover, the cost also balances out if you’re traveling to a smaller city with poor air connectivity.
These kind of options actually allow spur of the moment travels over such distances.
I know plenty of people who plan and use bus and flights due to the cost benefit, but also tons of people prefer the hassle free travel on shinkansen
For dense cities, it’s called a metro. A stop within 10-15 minutes by walk, 5 mins by bicycle and lots of share bike and bike parking.