Yes, it sounds absurd, but 95% of the population were enslaved.
The economy was closed off, agricultural based, and in all effect, a self-made hermit kingdom centered around a theocracy of the Dalia Lama.
While this source is Chinese, it is excellently sourced, and should answer essentially every one of your questions. It also details the history of the slavery, and the extent to which it was baked into Tibetan society. Not to mention a population breakdown that adds up to 95% of the population being enslaved serfs, or chattel slaves.
Chinese involvement arose primarily from three facts. The first being that if they claimed to be a socialist country, but allowed a neighboring theocratic country to practice chattel slavery, it would make them immensely hypocritical. The second being that bandits stationed in Tibet would frequently raid and pillage the Chinese countryside bordering Tibet, with these attacks only intensifying as the west sent Tibet arms and money. Finally, the third reason being that Tibet was historically part of China before the breakup in the early 20th century, and incorporating the country back into china made historical sense while freeing its population made moral, economic, historical, and ethical sense.
Japanese leadership would probably rather have every inch of Japan be scorched in nuclear fire then admit to one warcrime. Let alone apologize for it.