Direct Transit vs Visa-Free Transit

My wife and I are flying out to Okinawa Japan, but have a 17 hour layover in Shanghai. We've made arrangements to stay at the "Ramada Pudong Airport Shanghai" hotel during our stay, but I'm curious if we need to apply for a direct transit or Visa-free transit?

Also, in regards to applying, is there anything that we need to do before arriving to the airport other than bringing our passports and travel information?