I don't know exactly when demons come into Japanese mythology, Buddhism incorporated more rules, punishments, and gains rather than just life, worship, and then death like Shinto. They worked really well together later on in, like the 1500's on, I think.
Demons were pretty big in the Kamakura period. That's when all the shogun crap started happening and people started just having war after war, burning each other's castles, temples, and shrines down, and chopping off one another's heads. Because of this, around the Kamakura period, Hell Scrolls became really popular. They're scrolls of the Buddhist Hell. Things like rivers of fire and blood, bad souls being devoured piece by piece, bad souls getting coals poured on their crotches, etc. started popping up in art.
Demons usually were watching over as the souls self-inflicted pain or made sure that they were getting their rightful punishment. Lots of interesting pictures of demons popped up. Some look like old hags and others your typical ogre like from YuYu Hakusho.
As for Kami, mandalas are a great way to show a lot of them within one picture. Views of the Western Paradise work really well for seeing a lot through one object.
Kitsune and Tanuki, for some reason those two go hand in hand with me. Probably from Shaman King's little mockery of Ren and Stimpy with a tanuki and kistune.
Amano worked with the author Neil Gaiman to either recreate or create a story of a fox demon. I forget the title but I'm pretty sure it's based off of an actual myth. It's really beautiful and sad.
Anyone ever had tanuki udon? It's good :9 Little fried pieces on top of udon. Tasty.