Not exactly true. From the description it seems like Johnnys auditions are just dancing. And Johnny picks the boys himself. You have to keep in mind that they go to these auditions at a very young age. They are basically still kids and you'll never know if they become good looking one day or not. It's hit or miss.
Honestly I feel sorry for most guys in JE. Unless you are lucky you won't even get debuted. It's like a thousand hopeful boys and only a few are randomly picked to rule. Latest example is Yamashita Shoon an Ex-Johnnys in his 20s. He literally worked his a** of for that company for one half of his life and didn't get any reward, and he was really good looking and able to sing! But in the beginning of this year he left. I'm sure it's better for him, but that company...I just don't know, how mothers can willingly send their children to a Johnny audition. Thank good Hidaka left, and is now in AAA. You can say about avex what you want, but I'd rather work for them than JE that's for sure.