A Japanese friend of mine, said they exaggerate in anime. School girls don't have such short skirts in Japan and only in anime, they reduce that skirt length. I never thought anime can be extreme in indecency and I don't mind that for various reasons that I cannot disclose
I would say less that anime can be extreme and more that any media can be extreme. Yeah they do a lot of things in anime that don't reflect modern Japan, might give some people the wrong idea but this is just a case of double checking what you see before believing.
I think a lot of cultures are exaggerated based on what is seen in movies. I mean, are blacks as violent as portrayed in Hollywood movies? Well, some are, but they're only zooming in on felon types.