If you want an easy way out, go for the guided tour. However, I would suggest self-guided vacation than a guided one because:
1) Tour agent will charge your child an adult price and it's not worth it;
2) The itinerary of guided tours is not children centric. I would assume you want to have a holiday in Japan customized for your daughter; and
3) You’ll have to share a dining table with other members in the group and they may or may not like very young kids, particularly when your 5 years old misbehave.
With all these said, if you opt for a self-guided vacation, here are the tips for a successful trip:
1)If this is the first time you have vacation with your kid, keep the duration to 5 days or less; and
2) Don’t attempt to visit too many cities. Ideally, you want to stay in one single hotel for the whole duration. The reason is that you will realize you won’t be able to take care of your 5 years old kid and, at the same time, carry your luggage moving around from city to city.
3) Only bring one luggage and one back-pack. Bring a baby stroller, if your kid still needs one. Always keep in mind that you only have two hands, carrying your luggage and, at the same time, having to look after your 5 years old can be a challenge. If you travel on budget airline, call their customer service BEFORE YOU BOOK YOUR TICKET to confirm what type of luggage fee you need to pay for carrying a baby stroller. Some consider it a large size luggage and charges extra.
4) Choose a city with extensive public transport. Straight to point, Osaka and Tokyo are your top choice and I personally feel that Osaka has more attractions suitable for kids.
5) Don’t be aggressive with your itinerary. Avoid rush hour. It is impossible for you, with a 5 years old, to get onto a Metro during rush hour in cities like Tokyo or Osaka. Plan to have breakfast at 9AM and start your visit at 10AM. Plan to return to your hotel by 4:30PM and let your kid have a rest before heading out for dinner again.
6) Most restaurants in Japan are not Smoke-Free. If that bothers you, avoid places like 居酒屋. For breakfast, try to have breakfast in hotel as much as you can, even they can be a bit more expensive. Otherwise, すき家(sukiya), 吉野家(yoshinoya), 松屋 and Joyful are your friends.
7) Bring some hangers with you so you can wash your kid’s cloths and hang them dry in the hotel overnight.
Enjoy your vacation. Your kid will remember this wonderful time for the rest of their life.
PS: I would suggest you also consider Singapore, it’s a small city and very kids friendly. Metro is good and travelling by Taxi is cheap.