The sports themselves, top-league competitions of various kinds have already gone ahead (with lessons to be learnt, from some) and secure pre-quarantining/co-bubbling practices would be the way to go, and go for limited live-audience but with full broadcasting options.
For the pomp, if they aren't already wired up for the 'pixels' in the stadium for the crowd, they could probably run a whole lot of telepresence units dotted around representative cardboard cutouts of audience-members. I'm thinking an array of Aibos wouldn't be beyond Japan, or something like the Double 3 "ipad-onna-segway" things. Which might be a way to do the parade of flags (flagbearers in person, leading a 'nation' of remotely-present countrymen/women, as Aibos do dancing from the edge of the parade route and the near-ubiquitous mass-synchronsed lit-drones do something fancy in the air above them).
Several issues to overcome. Covid-test nobbling, for example. But by a month before the games there should be slack in the immunisation programmes to arrange for all confirmed competitors to be given the most appropriate product, put into action pre-agreed travel and accomodation covid-security. It won't be full capacity, as previously anticipated, but assistance for every country should prioritise over massive contingents from any single nation (US, UK, etc), perhaps helped by voluntary/can't-be-helped inability to attend due to difficulties of the pre-selection season.
The paralympics will he harder to accomodate (particularly with those with the more life-limiting conditions that put them at additional risk, although I think that'd apply more to the separate Transplant Games) though they'll have found the issues with their forerunner competitors in the non-para games, which won't hurt to fine tune things.
Look, I'm not responsible for all this, without the pressures of either budget or healthcare weighing down upon me on top of all the prior (not insignificant) logistics for such a spectacle. But if Japan can't work out a big old 6G-powered audience with RFD track'n'trace over the olympic park area, then I'll honestly cease to believe they've been building a mechagodzilla beneath the velodrome or prepared to launch a Firey Phoenix up from beneath the waves at the sailing venue.