That is rather the point. Japanese combat culture and weaponry became formalized and ritualistic - stultified if you will.
This only happened during the long period of peace after Tokugawa Ieyasu unified the country under the Tokugawa shogunate, which was rather late -- 16th century in fact. Prior to that, when the Japanese fought real wars, a more practical attitude prevailed.
For example, thrusting was banned in most schools of Japanese fencing.
Same again. During the period when there were real wars fought in Japan, and samurai wore armor, the only way to get through it with a sword was -- same as in Europe -- to thrust in between the gaps. Any such formalized restrictions on Japanese swordsmanship only came in after the peace established under the Tokugawa shogunate, when the samurai gradually transformed from a true warrior class into bureaucrats, courtiers, and administrators. In actual battle, nobody is so "honorable" that he will invariably abide by such arbitrary restrictions; the cheaters win too often for this to be practical.
Also, the Katana is largely a two handed weapon, meaning you had to get closer to an opponent than a Westerner.
Actually you didn't. Remember what I wrote earlier: a katana (or tachi, which is the same as far as the blade is concerned) can, unlike most western swords, cut effectively with the very tip -- its shouldered point is actually designed specifically for this purpose, it's a cutting point. A typical straight-bladed Western sword can't. Effective cuts can only be delivered at the center of impact which is usually six to eight inches back from the blade's tip, meaning the combatants would end up standing about the same distance from one another. A Western sword would usually only have a reach advantage when thrusting, though a European longsword -- also a two-handed weapon (and not meant to be used with a shield) -- would have an all round reach advantage, since it's blade would be around ten inches longer.
A Samurai might find himself skewed before getting close enough to slash a Western opponent. A Katana is generally under 28" in length.
Again, not necessarily. To get close enough to deliver a thrust, a Western swordsman will put himself in range of a cut to the arm or leg, if not the body, and a katana easily cuts powerfully enough to take off a hand, even with a quick, economical motion of the blade. Don't put too much weight on the matter of reach. It is an important factor, but both Japanese and Western schools of combat trained their student to fight a variety of weapons, some of which would outreach a typical sword (e.g. longsword, spear, polaxe, naginata, etc.). There are ways to compensate for a reach disadvantage. As I said, it will come down to a question of skill between the combatants much more than style of swordplay or type of sword.
Later western sabers were 34" or even longer and designed (and the user trained) for thrusting as well as slashing.
Some were, some weren't. Take a look at a British 1796 pattern light cavalry sword, for an example of a saber dedicated almost exclusively to slashing.
Of course it's all academic, but I find the differences interesting. In western thought (at least later, 17th - early 20th century) the slash was considered a mercy stroke. It was used to disable and allow the opponent to live and be captured. In fact, during that period Europeans and Americans stopped sharpening sword blades altogether, just to allow opponents to live and be captured.
Napoleon was famous (and roundly criticized) for shouting "Give them the point, the point!" when unleashing his cavalry at (I believe) Austerlitz. In effect, he was shouting "Kill them" which was considered very bad form for a gentleman of that era. Yet, it does illustrate that the point of a sword is the dangerous end. The Japanese didn't care because if you disabled an opponent, he would kill himself out of shame. They didn't need the point and didn't train to use it.
This is simply not true for most of the history of the samurai. When they had to face real warriors in real armor, the samurai most certainly
did train to use the point. As I said, it was the only way to defeat armor. The point is also far too useful to neglect for no better reason than tradition. Again, I cannot stress highly enough that so much of what people think about the samurai arose only after real warfare in Japan ceased and the only fighting samurai did consisted largely of formalized duels. In such an environment, restrictive codes and traditions could flourish, that practical, hard-bitten warriors, concerned with life and death and winning and losing would never follow in war. For example, take the idea that a samurai never retreated and doing so was considered so dishonorable that only ritual suicide by seppuku could atone for it. There's little basis for this from the period of actual warfare in Japan. During the 60 years of warfare that followed the end of the Kamakura regime in 1333, there are numerous examples of reports written by samurai themselves about attacking, and then choosing to retreat when they began experiencing casualties. The idea that a samurai always chooses death over defeat or retreat only arose later, during a long period of peace, with a stable government, and no more land rights, the Samurai needed to justify their existence. They began promoting that "the way of the Samurai was death," and exaggerating their sense of honor and loyalty. The whole notion of the samurai always following a rigid code of bushido and never, ever breaking the rules was created by the samurai themselves in the 17th century and later, when Japan was not ravaged by war the way she had been in earlier centuries, and the samurai could afford to indulge in such luxuries. When war was a reality, on the other hand, samurai were every bit as practical as other warriors around the world were.