MIKAWA Kenichi / 美川憲一 (that's his alias) is an singer who debuted a while ago (in male attire/pants) and then emerged in the 1990s with very gaudy costumes (which resemble 'drag'), under the guise of a woman.
He performs on the annual music show 紅白歌合戦 (Kouhaku Utagassen) every year, in ever-increasingly color costumes, and has been joined recently by "new half", transgender, or in any case cross-dressing celebrities and chorus girls to the amusement of onlookers.
Is he "gay"?
Is he homosexual?
Does he want to be a woman, or does he just enjoy wearing the clothing?
Does he consider himself female, or male?
Doesn't he have any qualms of being a spectacle?
... or is that the only arena in which gay or homosexual qualities are allowed in Japan, on TV as a spectacle?

Many questions! Few answers. Research and the translated Wikipedia article to come.
Compare these two performances for a brief illustration of his change in stage presence and appearance:
1973 (Showa 48) performance from 紅白 (Kohaku), 「さそり座の女」(Song title: Sazori-za no Onna,
A Scorpio Woman)
http://jp.youtube.com/watch?v=HoqIktHSD5g&feature=related
Same song, "para para remix" version, 2007, Kohaku:
http://jp.youtube.com/watch?v=urjyrcOMHsg
The person dancing on Mikawa-san's right (the female-looking one, a man performing as a female, stage name "IKKO") annoys me greatly for his/her loud nature and childish behavior.. which garners a lot of attention. I'm not sure how much of it is a stage act, but Mikawa-san seems elegant or elevated while the younger, louder cross-dressing presumably "gay" talents are annoying and just want attention in the spotlight. Excluding Mikawa-san, who seems to have undergone a gradual transformation since his debut decades ago, I think the talent on TV nowadays who are cross dressing are largely doing it for media attention and are not in fact transgender, homosexual, or dignified in their actions.
I have an American friend who likes "HARUNA", another 'new half' talent and says she's cute.
But in Japan, homosexuals are a spectacle because of the way outrageously "gay" talent behave on TV shows, shocking and aweing audiences. (Males always dressing as females-- cross dressing is a very common theme on variety shows.)

I think there's some evidence of sexism in that there are few examples of women dressing as men and getting attention; Takarazuka is the only exception I can think of, but that's considered an art form now. Maybe some females "cross dressing" as males would balance things out?