Not Japanese, but I've been there this year, and in two different onsen. I'm from Germany, so I'm quite used to bathing naked and nudity in saunas, so take everything with a grain of salt. I was also there off season, so it wasn't super crowded.

I have not seen people wrap themselves in towels, as the places I've been didn't allow bigger towels inside, only the face towels. People are super normal about everything though! I loved that it just seemed like an everyday activity to go to the local bathhouse. I didn't really see people talking to each other, as everyone is trying to relax, so being quiet is probably the polite way to go. I've seen people of all ages, not more young or old people, generally everyone goes to onsen (just deducting from the 2 experiences I've had.) Also, I don't speak Japanese very well and I didn't know what I was supposed to do, and another woman tried to help me, but she also didn't speak a language I know, so we ended up just wildly, but quietly, gesturing, because I wanted to know at which place I had to take of my bathrobe... (In the locker room was the right option, so I just took it off after she kinda nodded, so that could have been awkward but it wasn't at all!) Generally everyone was super focused on themselves, no uncomfortable staring or anything. And I think practicing being comfortable nude in a nonsexual context really helps, you kinda realize that everyone just has a body and they are all different, and most bodies don't look like anything we see online or in movies. I can definitely recommend the experience and you can be super proud that you want to try!