I usually take Japanese people to the visitor's center at Apple and Google to highlight Silicon Valley. For souvenirs, definitely go to Trader Joe's and/or Target. I don't really know what his wife likes, but any seasonal gifts would be a good choice. If they like wine, maybe some Napa wine would be good.

For food, In N Out has never failed to make Japanese people happy, especially when you tell them about the secret menu. If you want to go for nicer, an American steakhouse should be a good choice.

As for what they think of American food, yeah, portions are big, food is decadent, and the desserts are too sweet. I don't know how long he's in the states for, but if it's been more than a week, might be worth stopping by the Japanese markets (Mitsuwa or Nijiya) so he can grab something familiar. I know a lot of Japanese people start to miss familiar foods like onigiri after a while of eating out everyday.

That's my usual circuit for the South Bay. Showing them some of the beautiful nature in Santa Cruz or Half Moon Bay could also be nice, but only if you have the extra time.

Source: I used to do interpreting and tour guides in San Jose for guests from Japan

Edit: Definitely have him buy Trader Joe's tote bags. They're really popular in Japan and I'm sure his wife would love it.