To what extent was Japan transformed by the influx of ideas and information from China between 500 and 1000 CE ?

It would be hard to overstate the degree to which Japan
was affected by China during the time period you mention.  Japan's society was
transformed in some very important ways.  Here are two
examples:

First, it was during this time that Buddhism
entered Japan.  At first, it was limited to the upper classes but, during the 8th and
9th centuries, it spread to all segments of society.  It is credited for changing
Japanese society in many ways.  One example of this is that Japanese started to be
cremated more during this time instead of buried.  Another is that the eating of animals
(though not fish) became much less common.

A second example
of the impact of China is the introduction of its writing system.  Japan adopted the use
of Chinese ideographic and pictographic characters (now known in Japan as kanji) even
though they were not really suited for the Japanese language.  Writing, of course,
transformed Japanese society as it allowed for things like literature and
recordkeeping.

These are two of the many ways in which
Japanese society was transformed by Chinese ideas in the period you
mention.