I have repeatedly read that Japan has poor quality iron, but what exactly does that mean? Iron is an element, so all of the reserves were in an unfortunate oxide requiring sophisticated refining? Just low total abundance?

Lots of impurities and limited quantity. Most of it was in ironsand, and even then most of it was in fairly low quality ironsand.

They had to get pretty creative in their use of ironsand to produce high quality steel.

Getting a pure ingot of iron is no simple task if you don't have access to a good furnace. So you'll end up with 'bad' (impure) iron if it doesn't come out of the ground in reasonably pure chunks.

All the cool swords seem to come from societies without access to good iron. Ever seen a 'Viking' sword?

Impurities.

Notably phosphorus is very hard to get rid of when it's in your metal. Before better metallurgy, the best steel worldwide was made out of low-phosphorus ores.