Kevin, I'm with you. I don't do it much any more, but I used to just endure the pain as training. I might not be able to use that hand the next day if someone could generate allot of pain, but I would just stand there and smile at them.
I never go for pain. Your description of the mechanics is very good. Much better than I could have managed. My addition - nage should squat to raise his arms rather than use muscular strength. Using the legs to raise uke's katana (arm) is most effective and powerful.
Our sensei goes for the pain, it's our second in charge theortician that teaches doing proper mechanics. The former was trained USAF - Midwest, the latter came from ASU. Hope that helps.