What will be the likely implications to travellers?The situation will be very similar to the "Golden Week" in spring:
http://www.japan-guide.com/e/e2282.html
Trains will be crowded especially towards the beginning and end of the holidays.
Will everything stop and holiday areas be booked solid or.....?
Almost nothing will stop. To the opposite! Everything will be open and compete to attract tourists. Popular holiday destinations will be crowded or booked out.