The traditional way of cooking mochi rice is to steam it over a wood fire, and then pound it in a tree trunk pestle with a big wooden mallet.
Then, while the mochi is still hot, you grab a little ball of it, make a disk, then pop a ball of sweet bean paste into the center. Wrap up the bean paste, then quickly pat the mochi into a bun shape. Hurry! You have to wrap up all the mochi balls before it cools down and gets stiff. This will give you "daifuku."
These days, there are mochi-making machines that will do the job for you. I suppose you could microwave the ingredients, but . . . I wouldn't want to do it.
To cook mochi: Put slices in soup and simmer until stretchy, or grill it over a fire. Another way to cook it is to put it on a greased tray (the grease is very important -- mochi sticks!!!), then pop it in the toaster oven or a hot oven (about 200 C/400 F for 5 to 7 minutes) until it is toasty brown on top. Serve with soy sauce.
You can fry it in butter and top with soy sauce, too. Or wrap chocolate in the middle for "choco-daifuku." Or put the soft boiled mochi in soybean powder (kinako) and sugar.
There are a lot of ways to enjoy it.
My family makes mochi and daifuku every year for New Years, but they make a ton of it! In the past couple of years, they have used the machine to cook the mochi rice and pound it.