The manga that the movie is based on revolves around university students and the story traces the coming of age of these students. Sometimes melancholic, sometimes serious, sometimes sad, many funny moments, but genki is definitely not the word I'd use to describe the story.
As for Arashi back in 2002... I'm not too familiar with their history, but back then folks like V6 and SMAP were getting much more attention than the younger JE members unlike now. It's like a changing of generation these few years, with the older groups focusing more on dramas and stuff, the younger groups are rising up one by one.
By the way, Arashi members are good friends with Kanjani8 older members since the whole bunch of them joined JE around the same time ('95-'97) and did alot of shows and concerts together. Did you happen to watch the episode of HeyHeyHey whereby Arashi were the guests and they were talking about Kanjani8? Sho and Aiba were going on about how weird Kanjani8 members are and how they do not want to be associated with them
, but it was all for fun of course.
Johnny Kitagawa is pretty old, I think he's around 70 plus. I am not too sure of the history but you can check out a bit of him and JE's history
here. As for his criteria for choosing the members of new groups... actually I don't think he goes around choosing them, it's probably a collective decision by the top few people in the company deciding who should or should not debut. The guy you mentioned is actually Ikuta Toma, I have no idea why he has been passed over so many times actually. Apparently the Arashi members were pretty unhappy that he did not get to debut with NEWS.