JapanRailPass and seat reservations

Hi
I need something confirmed.
From what I read there are two components to to a rail ticket : a base fare and a Seat Fee.

A Green Rail Pass covers the base fare and the Seat Fee ( 1st class)
A Ordinary Rail Pass coveres the base fare and the Seat Fee. ( 2nd class)

We use our Rail Pass to get tickets and seat reservations at the same time.

If we are unable to get a reserved seat on the train we want to take then

we have to line up to get an unreserved seat ( cheaper but also covered by teh Rail Pass)

Is that the way it works?
What tax has to be paid on teh advertised ticket prices?

Our trip will be from Oct 4 to Oct 17 2013.

• Tokyo to Nikko then Nikko to Tokyo - one night stay in Nikko
• Tokyo to Takawama the Takawama to Kyoto - five night stay on Takayama area /two nights in Kyoto
• Kyoto to Koyasan for one night stay
• Koyasan to Tokyo

Rob