I'd think that Japanese-English dictionary is not supposed to be written like a regular English dictionary. Otherwise, dictionary users would fail to understand the actual meaning that supposed to make sense from Japanese point of view.
Lost in translation
Say if there is such dictionary that includes meaning of a word, made similar to the original text using sentence-by-sentence translation, just like what the question described.
Then, how would that appear?
In a pure Japanese-Japanse dictionary, using same example in the question i.e. 町 on dictionary.goo.ne.jp, the entry appears like this:
ちょう〔チヤウ〕【町】 の意味
１ 地方公共団体の一。市と村の中間に位する。まち。「町」を「ちょう」と読む府県と、「まち」と読む都県とがある。
[...]
Should we have such Japanese-English dictionary as described, for the same example keyword 町, the entry may appear likewise:
Meaning of ちょう〔チヤウ〕【町】
1 An area or a municipal of local government. In terms of scale, it stands in between city and village. 'まち'. There are prefectures that read '町' as 'ちょう' and prefectures that read as 'まち'.
[...]
That's weird. The sentence-by-sentence translation may be acceptable, but that doesn't make sense for learners who are not aware of municipalities in Japan. Even just the first line of text that explains the meaning, there are few problems to deal by the editors of such dictionary:
Whether to give more verbose translation to the kanji words instead of direct translation.
Source text: 地方公共団体の一
Machine translation: "One of local governments" (direct, poor)
Human translation: "A local government area" (debatable)
Whether to translate text from kana to romaji; doing so will improve readability but will lose some senses of the source language.
'まち' to 'machi'
'ちょう' to 'chou'
Whether to include the intended meaning that were not found in the meaning of original text; but the included word does not always mean like that from Japanese point of view.
Whether to give loose translation or exact translation of particular words in the meaning
- 府県 and 都県 (both are prefectures with distinct definitions, but the latter is non-translatable in English)
Despite my self-translated text are also debatable, such dictionary is what one would refer to as "lost in translation". That is, the meaning was unable to be fully translated in English.
Wikipedia as bilingual dictionary
ウィキペディア and Wikipedia together as one, is the "ideal" Japanese-English dictionary that works more or less similar to what have been described in the question. The Wikipedia in two languages could link to each other per article, by following link in the sidebar menu.
For example, the source article 町 on ウィキペディア is linked to the relevant article List of towns in Japan on Wikipedia.
From source article, 町 on ウィキペディア:
町（まち）は、市街地やその区画のこと。 「町」の読みは一般には「まち」だが、複合語や、個別の町については「ちょう」と読むものも多い（下記、#行政町参照）。[...]
From linked article, List of towns in Japan on Wikipedia:
A town (町; chō or machi) is a local administrative unit in Japan. It is a local public body along with prefecture (ken or other equivalents), city (shi), and village (mura). Geographically, a town is contained within a prefecture.
That's better. The source and linked articles makes much sense than the former, thanks to Wikipedia. Although above are not equivalent in terms of sentence-by-sentence translation, but it tells the actual meaning of 町 with Japanese nuance that requires the knowledge of municipalities in Japan.
The downside is that the link to relevant article in target language may be subject to changes or not available at all. This would depend on how well Wikipedia is managed and reviewed by the volunteers, given that it is a free encyclopedia.
Using physical dictionaries
While online dictionaries could handle queries for text in ローマ字{じ}, 仮名{かな} and 漢字{かんじ} (romaji, kana and kanji), physical dictionaries are limited to 仮名 (ひらがな・カタカナ) as in English equivalent of alphabets (ABC).
Like English dictionaries are looked up by alphabetical order i.e. A, B, C... Z, so do Japanese dictionaries are looked up by kana order i.e. あ、か、さ、た、な、は、ま、や、ら、わ. Therefore, 町 is looked up as まち in a Japanese-English physical dictionary, which will return not just 町 but also other entries of kanji that are read similarly.
From the seventh edition of Sanseido's Daily Concise Japanese-English Dictionary (I use 中型版 medium size version):
まち 町,街 a town; a city; a street (街路); a downtown (中心街); ~中(の人)が知っている The whole town knows about it.
まち 襠 [衣服の] a gusset; a gore
まちあい [...]
Depending on what kind of dictionary that you use i.e. concise or comprehensive, there may be longer description for each entries. A Japanese-English physical dictionary would include examples on how the word may be used and the translation in English, if any.
Summary
If learners are expecting a dictionary to explain the meaning in detail, that is more like needing an encyclopedia than a dictionary. Bilingual dictionary is not supposed to be written like a regular monolingual dictionary, due to different nuances in respective languages.
Use Wikipedia as bilingual dictionary. It is not perfect, but that often helps by linking from source article in Japanese to relevant article in English, unlike typical Japanese-English dictionaries that have none. Else, use physical dictionaries and learn from example usage of word in given phrases or sentences.
