HOUSING WHILE ON L VISA

Reference this comment about tourists renting apartments (The Visa Basics):

"No L Visa gives you the right to work or, unless you're a Spouse, rent a local apartment." 

I intend to stay in a serviced apartment while I am on a L visa.  Does this meet the criteria for a hotel in your opinion?

And if I decide to stay on with a 12 month visa, just out of curiosity, do the local authorities really care if I rent an apartment?

That really depends on how the local PSB interprets and enforces the rules.  Some won't thing it's wrong.  Some will think it's wrong, but won't worry about it.  Some will think anything other that a 4 star hotel with 24/7 security guards will do.