I thought you are coming in July (from the beatles post I rememberº)
Traveling during the Obon week, I will say 7th to 16th in 2013, will be terrible to you. No bus, ferries, and airplanes will be available without reservation, and you¡¦ll have to stand up hours in the trains wherever you go¡K
I would avoid moving around at any cost during 14th~16th of August in 2013.
If you are staying in Tokyo during Obon, the only festival I can think is Fukagawa Festival happening August 15~16th (at Koto Ward).
During the summer, most of Japanese cities and towns hold smaller ¡§Bon Festivals¡¨. You will probably see the posters at the stations and go check them out. If you want to see larger Japanese festivals though, you probably should come early August and make a trip to Tohoku regions.
Nebuta (Neputa) Festival - August 2~7th (Aomori)
Kanto Festival ¡V August 3~6th (Akita)
Sendai Tanabata ¡V August 6~7th (Sendai)
Hanagasa Festival ¡V August 5th ¡V 7th (Yamagata)
Gozan Fire Festival is, in my opinion, pretty boring because it¡¦s just the fire in the shape of 5 different ensigns of 5 different temples, and looks very small with your naked eyes. But if you are coming in July, the Eastern Japan will be a lot more enjoyable.
Nachi Fire Festival ¡V July 14th (Wakayama)
Gion Festival ¡V July 16~17th (Kyoto)
Tenjin Festival ¡V July 24~25th (Osaka)
Sumiyoshi Festival ¡V July 30~August 1st (Osaka)
Takayama is a really beautiful place and I will say every intermediate traveler should visit. But if you are going to Takayama, you should recommend you to stay there and visit Shirakawa-Go Village (one of the World Heritage). And if you go these area, syou should move up to Toyama prefecture and check out ¡§Owara Bon of the Wind¡¨ happening September 1~3rd. This one is considered as the most beautiful Japanese summer festival and definitely my favorite one.