So 3/4 PS5 games in the top 30 are up there only because of the PS5 bundles. That isn't a good look for a system that just passed 2 years of being on the market. The Wii U, PS Vita and Xbox 360 had better software sales during the same time period.

Are those games in the bundles physical copies? I thought they were digital ones. 

In the states, it's digital bundled but I think in Japan it's physical since everyone here keeps saying digital isn't a thing in Japan 

Luckily for Sony, the PS5 is seeing more stock coming in. Some decent games for the Japanese market also coming up, so there should be a small recovery.

The bundles are with digital codes in Japan (everywhere actually). Famitsu counts digital codes as retail copies if they're sold through retail.

Whoever says digital isn't a thing in Japan is an idiot and needs a reality check asap. 30-40% digital is normal in Japan now and vouchers bring some Nintendo games up to 60% digital.

The legs on Switch Sports and Momotaro are really something else.
PS games by contast don't seem to have much staying power these days.

They're digital. Famitsu will count digital sales for download cards and if a game was bundled with a console. Pretty much like if they see that a PS5 sold was the GOW bundle then that counts as 1 sale for PS5 and GOW. So, if GT7, Horizon, and GOW weren't bundled then they wouldn't be charting at all.

Are those bundled games free or did they have to pay full price for it? 

The PS5 bundles you have to pay extra ($50 - $60). Famitsu will track any game that's in a bundle regardless if it's "free" or not.