Silverpianist, the picture I've built up of theory teaching in Japan so far is...
"Solfege" - sight-singing, pitch and rhythm recommendation seems to start very early, partly because people believe that perfect pitch can be taught up to age 3, and substantially improved by teaching up to around age 7. If I had realized that this area existed, I would have started son here rather than with an instrument, since singing is so basic...
"Music grammar" - called "gakuten" in Japanese. This seems to be primarily aimed at piano students, and involves improving reading and understanding of written music. Aimed at older children and young adults who are starting to think of auditioning for college or taking teaching qualifications. I think they will get full theory lessons later, but not entirely sure how separate the two categories are.
"Music theory" - called "ongaku riron" in Japanese. Perceived as "difficult" and "specialized" and aimed at people who want to arrange or compose music or harmonies. It seems that every "easy" book on this topic is aimed at rock and jazz guitarists and songwriters, and there are lots of such "theory in ten minutes" books around! I don't think most classical musicians hit this area until university. Teaching about styles and music history probably not taught under "music grammar".
The attitude of son's violin teacher is "theory is something you cram up on for a year before you audition for a conservatory high school or university". Period. However, piano teachers seem to include more theory, and all the theory teachers I know also teach piano.
Parents here will pay anything from 500 to 500 pounds for ONE lesson with a top teacher if they are really fanatic about their kids' advancement, and I recently saw a discussion about whether or not a violin that cost nearly twice the national average salary was "good enough" for a 14 year old! Pitch training for infants is quite common (though mostly in major cities). This gives some idea of the relative balance between practical achievement and theoretical understanding in most people's minds.
Finding theory texts in Japanese on theory suitable for a child is hard. I finally found one book which teaches Italian terms via silly puns in Japanese

but that's about it.
Alternatively, I see heaps of "aural training" CDs aimed at young adults in English, but most Japanese musicians get these skills when young, so there are far fewer products like this around in Japanese - except for very young children. I don't think the situation described by indy_epx would be common here with teens or adults.
Kenm's comments on intervals was interesting - I started pointing out the interval leading up to notes where son's intonation wasn't clean, much more effective than saying "That's a D, dolt!".
Maggiemay...kids who switch off theory. Interesting. Maybe there are two types - those who are not THAT interested in music anyway, and those who are still coasting along on their aural skills, and have yet to hit the Wall of Necessity in their playing. I don't think that even son's teachers knew HOW much he was relying on his aural skills and HOW little he understood of the written music. Actually, once he had a vague ability to read music, sight reading of very easy stuff with 30 seconds prep was a challenge he enjoyed and which has sharpened up his attention to detail.
Son's aural skills are so much ahead of his visual skills (in other areas too, not just music) that I'd almost say he is slow in visual tracking skills. Kids like this talk smart and play well, very hard to tell when they are struggling and when they are slacking with written material.
I tried doing things like coloring the "A" space on the staff to make the music more readable for him. That worked OK. I also got him to color in things which recurred in the music, but that was a waste of time - at that point, he couldn't read music well enough, and thinking back, I should have talked about the repetition in terms of intervals instead of transposed notes!
As for motivation, who knows??? I can see that now HE wants to learn, before, it was only ME that wanted to teach him. Yesterday I told son to read the section in the Ab theory guide on the circle of fifths, telling him about it briefly as I handed him the book, in case he had trouble reading it in English. No response. Ten minutes later, he rocketed into the kitchen, saying "Mum, Mum, major scales start 5 notes above each other, there's a neat thing called the circle of fifths...!" Err....hello...??!
As for teaching on non-keyboard instruments, I'm not sure what the right approach is, but I don't think it's impossible to develop a sense of harmony.
I think he must have developed a sense of intervals through inadvertently transposing songs that he heard into keys that were easier to play on the violin, and then becoming more aware of what he was doing. Recently he started obsessing over harmony, singing harmony instead of unison to CDs, extemporizing "2nd violin" while teacher played melody etc. I'm sure that will be a good basis for studying the theory involved.
Son's guitar teacher uses a lot of duets and insists that both parts are learned. Maybe melody instrument teachers could use more duets and song accompaniments, and also encourage advanced students to learn a harmony instrument?
Rhapsodin, your comments on acoustics sound very interesting, and that sounds like an excellent way to alert boys to "why theory actually works"! Anything you can recommend for more information?
Sorry to go on so long - so many interesting things to respond to.