For years, my two children, Papa and I ate, slept, and lived in one tatami (grass mat) room. Our toilet, however, had its own room. Most if not all home toilets have their own room in Japanese houses. It is usually next to the bathroom which may also be the laundry room.
A pair of toilet slippers (usually plastic) lay on the floor inside the toilet's room. As you may know, street shoes are left at the front door and house slippers are put on. Going to the toilet, you leave the house slippers outside the door of the toilet and slip into the toilet slippers. "That's manners," as Papa says. And under his advisement, a toilet brush is also provided as a courtesy to guests.
Here is a picture of the top of our toilet. There is a water spout that pours clean water into a little sink after you flush. You can wash your hands here and then use the towel hanging next to it. I put pebbles in ours for decoration. People usually leave it empty or put a deodorant decanter or colorful plastic pieces in it. If the toilet does not have its own sink, guests use the sink in the laundry room. Most of our guests prefer to do that anyway.