Just a few clarifications and extra notes, as it seems like Zer0 made that guide with the japanese Reminisce version and hasn't updated it >3>
The character you're looking for is called "Kazubolo". You'll easily find him in the places mentioned, and you'll definetly know when you find him. He's in areas not frequented by any other PCs, and he has unique looks, very different to the other characters you've seen before.
If you suddenly can't seem to find him, like...he's supposed to appear in Mac Anu, but he isn't there, then try to look for him again in the last area you found him at (Lumina Cloth, in this case), and continue. This happened to me when i did it, i don't know why but the game acted like if i hadn't talked to him in that place...so all i did was talk to him again and then continued. So yeah, just so you know what to do in case it happens to you as well.
As of the password...Its purpose was indeed some offline Japanese contest thing, so you can just ignore it.