Maybe someone has posted this link before, but I couldn't find it with the search function. The movies (click on "watch the movies") are extremely interesting and informative:

http://www.wonder-okinawa.jp/017/eng/index.html

From the information about the classical Nisai dances given on the site,
http://www.wonder-okinawa.jp/017/eng/nisa000.html
these incorporated "karate" (the term used in Japanese as well) elements to reflect that they were about young men. The dances were created after the Satsuma gained control, and often were about young men traveling to and returning from Satsuma or Edo.

Nothing indicates that martial techniques were intentionally "hidden" in the dances. There would not have been any reason to hide things because these dances were only performed for the elites. Most likely, older waza were inadvertantly preserved in the dances. As Okinawan fighting arts evolved from the 1600s to the 1900s, some of these waza may have become disused.

That is likely what Motobu Choyu meant by saying advanced techniques could be found in the old dances. Interestingly, he is also said to have been close friends with a dancer named Tamagusuku Seiju. Another Tamagusuku is credited on the site with being the creator of a well-known Nisai odori.

The video of the Nisai odori was too short for me to make any comments about. I'll try to find more.

Here's a fuller video of a nisai odori.

http://www.youtube.com/watch?v=VlEQ43a3szc