"China is overstepping its bounds..."
China is a rising power, economically and militarily, and likely culturally as well. The United States is in relative decline. It's only a matter of time until those two trends collide, or the lines on the graph cross, as it were. The question is whether, as the declining power, the United States will be willing to cede various kinds of international influence (and responsibility) to the Chinese, or whether the changing power relationship can only be sorted out through military conflict (e.g., we lose, in all probability).
You can argue that the South China Sea isn't a Chinese lake - but it certainly isn't an American lake.
Shifting gears...
The US commitment to the defense of western Europe through NATO, and of Japan through treaty as well, isn't a matter of doing either the Europeans or the Japanese any favor. We created those alliances, and maintain those alliances, because it has been manifestly in our interest to do so. Yes, we commit a larger portion of GDP to defense than any of our partners do. In return, we get an absence of major conflict among historical adversaries. We also get a few side benefits - for instance, the dollar is still the international reference currency, which provides a host of economic advantages to the United States. That's not inevitable; it's part of the deal. We dominate institutions like the IMF and the World Bank because we're the international leader, the treaty-maker. If we choose to walk away from that leadership role (and we well might), then those ancillary benefits will go away, too. Somebody else will step up to play the role of international organizer. When the Yuan becomes the international reference currency, what do you think our balance of payments will look like?
Regarding the expansion of NATO - I agree that was unwise. Our involvement in Ukraine was completely foolish (and by that I have reference to destabilizing the Yanukovych government, and all the "pro-democracy" posturing since. I'm more sympathetic to the Baltic states - but from a realistic point of view (and yes, I chose that word very deliberately!), there's not a heck of a lot NATO can do if Moscow turns up the pressure there.
Realistically, with the decline of the Soviet Union (and still today, notwithstanding Russian revanchism), NATO's principal (if unspoken) remaining purpose is to keep a couple of allies from reverting to their traditional antagonism toward one another. You know who I mean here. Trying to use NATO to intervene militarily in other parts of the world (can you say "the Middle East") is, again, completely foolish... and of course, such efforts haven't ended well.