My personal feeling is this is what happened:

In the 90s NOA started to gain more autonomy/power. Yamauchi, unlike Iwata or Miyamoto was a businessman, not a developer and and having a strong American division for American sales just made sense to him. Who cares if the game is made in Antartica as long as it sells? I think that was Yamuachi's thinking. 

However I think at Nintendo amongst the developers/board elite ... they quietly resented NOA becoming more of Yamauchi's darling.

Yamauchi heaped massive praise on Donkey Kong Country, which effectively turned the tide of the 16-bit wars in Nintendo's favor. And again, GoldenEye probably saved the N64 too. And Rare was given far more freedom to do things like the M-rated Conker's Bad Fur Day. NOA was allowed to do things like Nintendo Sports, greenlight Starcraft 64, and sign deals for Star Wars games and the like.

Yamauchi also personally inked the deal with US-based Silicon Graphics for the N64 chipset. 

When Yamauchi/Lincoln/Arakawa retired though, Iwata being part of the Japanese development fraternity alongside the other Nintendo Japanese suits consolidated their power and started basically forcing all the Western elements of Nintendo out.

those are some interesting facts about iwata. maybe. maybe...just maybe it is time for him to go, but will another like him just rise to the ranks?

They tried Power and Graphics with the N64 and GC. They tried westernized games. Sales went from bad to worse. They still made money but the choosen direction was not going to make them win over Sony.
Rare wanted Conker to be "westernized" and Bad Fur Day features graphic violence, sexual themes, strong language and toilet humour. For a family orientated company this is a sign to withdraw.
A new president has to show initiative: so he cuts of the parts that were not essential, brought everything closer to home (Rare is sold). Then everything seems to go Iwatas way: 2004: release of DS - success, 2006: release of Wii - success. Naturally he draws some conclusion of theese events. I guess what he learns is something like: keep things close and under strict control.

TL;DR

User was moderated for this post - Conegamer

They aren't biased, they just do what they do best which is unique, Japanese games.

What's the point of even posting in this thread then? 

EDIT: Nevermind. He actually has a point in this one.

I think this was true about in the recent past but I do not think it is as of the recent present, we've been seeing a lot of more "western" changes going on with how NoA has been working since the MK8 release.

It wasn't Nintendo's decision to sell Rare, Nintendo only had some stakes in the co. It became available on the market and multiple companies were looking to buy including Nintendo, Yamauchi didn't want to pay the asking price, and Microsoft just so happen make the highest bid.

You can't say Nintendo broke 2nd party relations because it was 2nd parties who were looking for greener pastures. 2nd Parties come and go, SK were on other platforms before Gamecube. Their relationships aren't so different from Platinum Games, PG signed contracts w/Ninty but are also free to sign contracts with others co. such as Microsoft.

You're making a false comparison here... sales didn't go from bad to worse with the N64 and GC because Nintendo went for "power and graphics" (if by power and graphics, you mean technically on par or slightly ahead of their competition's hardware)... sales went from bad to worse because Nintendo made some dumb decisions such as sticking with more expensive and restrictive storage mediums (which cost them the bulk of their 3rd party support during the N64 days), and then refusing to embrace the emergence of online gaming while designing their console to look as kiddy as possible during the GC days.

And you missed the point entirely with Conker... Conker was not "westernized" (and westernized does not automatically mean  tons of violence, sexual themes, strong language and toilet humor... as if Japanese games and anime NEVER feature any of those things, right?!?)   Rare created what eventually became Conker's BFD as a satire on the over-saturated bright and colorful 3D platformer genre (which includes many of their own games such as DK64 and BK1&2 and what was supposed to be Conker 64).  They were inspired by the likes of South Park and basically gave their own cute and cuddly platformer the South Park treatment.

On any other platform Conker would've been a huge hit, pushing the N64 to its limit and featuring great writing and gameplay... but because Nintendo protects their family-friendly "kiddie" image above all else, they refused to promote the game and wouldn't even publish it in NA or Europe.