That would be rather expensive surely?

I did that for a while (like two months). The shinkansen pass for Odawara->Shinagawa/Tokyo costs about 70,000 per month (it's a bit more now due to the tax increase). May be reasonable if your workplace is close to Shin-Yokohama or Shinagawa or Tokyo, but if you're in a place like Roppongi, there is very little benefit. Plus the shinkansen that stop in Odawara don't run very often, and the last train is pretty early. (Don't know about the other shinkansen.)

Not particularly, since most employers reimburse your transportation costs (generally up to 50k yen, but I’ve seen 100k).

vs living in a similar sized place inside Tokyo itself?

I'm not very familiar with Tokyo real estate but prices far west on the Chuo line are quite reasonable, but even out there you're still much closer to the CBD than Shinkansen commuting from eg. Saitama or Kanagawa. (Of course I'm not arguing about quality of life, sailing in from your minka in the real countryside on the Shinkasen sounds great if I could afford that life)