Webster > Oxford, end of discussion

Yes, along with changing their word choice and grammar to fit the situation as well - informal vs formal, personal vs polite, business vs political, elder vs youth, male vs female, etc.

Yeah, from my basic understanding of language, it seems like Japanese is a far denser language that something like English. I've heard that people are able to indicate tone and other such things in a way that's just kinda built into the language, whereas with English or similar languages it would require extra sentences that seem awkward

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There are a lot in theory but in practice most of the ones in this picture aren't used, especially not all by one person.

Each person generally can have up to 2/3 pronouns they use. One for acquaintances (and the one you use most of the time), one for strangers where you need to be a bit more formal and then possibly one for when you're speaking to someone in a higher position. Outside of that, only very specific scenarios would require a different pronoun.

Andd for example if you use "watashi" with acquaintances, that one's also valid in many formal scenarios so you wouldn't need a separate one for that, you'd only need a more formal one like "watakushi" when speaking to someone in a high position. So all in all it's really not that complicated.

For very stilted, academic, formal conversation, it is, but for conversation with social superiors, social inferiors, peers, friends, family, in a business setting, a political setting, or any number of other social situations, you start using a lot of other first person pronouns instead, especially distinguishing male from female, childish from elderly, etc.