After the leaf crush, many of Jonin level Shinobi had died. Sand village ninjas retreated back and found that their Kazekage was killed and Orochimaru impersonated the Kazekage to attack the leaf, they shut down their borders and increased the security of the village. They also stated that Orochimaru was a rogue leaf Shinobi who impersonated the Kazekage and they were not to blame as the Kazekage was killed by a leaf rouge nin.
But Konoha was in utter chaos. There was a huge funeral for the dead ones. After the funeral, it was decided that it was time to elect the fifth Hokage. So Homura and Koharu decided on electing Jiraya and sent a message to Jiraya about what happened and everything. Jiraya refused to become Hokage and went to find Tsunade. At this time, two people wearing black cloak with red cloud patterns arrived inside the village without detection. After finding out that Sasuke and Naruto was not in the village, one of them frowned. He was Itachi.
At this time, they were noticed by Asuma and Kurenai. As usual, Kurenai was not fit to be a Jonin as she attacked a Genjutsu master who had a Mangekyou sharingan with regular Genjutsu. She was dumb enough to attack an Uchiha with Genjutsu as even a non-ninjas would know that it won't work. Itachi wanted information, so he used a strong Genjutsu hypnotising both of them and learnt what happened to Sasuke. After learning everything, Itachi warned Danzo about pursuing Sasuke then went out of the village and Kisame, his partner followed him.
At a gambling city, Jiraya went to look for Tsunade and finally found her. After having some drinks, he spoke "Tsunade, sensei passed away" and he explained how Orochimaru attacked and all. Tsunade didn't seem to care about the village and said "Oh! So that happened. Why did you come now to find me?" Jiraya replied "The village decided you as the next Hokage Tsunade. I hope....." he was interrupted as Tsunade said "I'm not interested in the village Jiraya. I do t care if the village exists or not. Only a fool would become a Hokage".
Hearing this, Jiraya also nodded and said "You are right Tsunade. I just passed in the message to you". Seeing Jiraya give up so easily surprised Tsunade. Jiraya would not have given up before, but knowing what the higher ups did to Minato, Sakumo & Naruto from Kakashi, he lost hope in the village. So he too didn't care about the village anymore. And seeing the surprised face of Tsunade, he explained everything Kakashi told him. The crimes done by Danzo and the advisors and how knowing everything Hiruzen supported them and finally what broke the string was the case of Naruto and Sasuke. Both Jiraya and Tsunade talked about old times and started Reminiscing the past and drunk.
At the morning, Jiraya sent a message to the village stating that Tsunade or he will not become the Hokage and both of them have retired from the life of Shinobi. He also unsummoned the message frog that he had left in Konoha. Seeing his message, the advisors were in disbelief and finally Danzo took this chance and elected himself as the Hokage as there were no Kage level Shinobi left in the village except him. Even the Daimyo approved and finally he was crowned Hokage. Most of the people didn't like Danzo being the Hokage. So internal discord started.
After Danzo became Hokage, Kakashi was attacked for his sharingan by the root Shinobi when he was at the graveyard, but he escaped and left the village after the incident. Kakashi was labelled a rogue ninja along with Sasuke. Danzo didn't care about Sakura and he couldn't label the Jinchuriki a missing nin. After he became Hokage, he forced all the orphans to join the root and also forced many talented Shinobi children to join root. He also converted the regular Anbu to root by placing seals on them. He became a dictator. The ones who opposed him either disappeared or came under his control.
The first thing he did was reject the peace treaty offered by the sand village for the recent attack and declared them mortal enemies. The next thing he wanted was a Jinchuriki. So after not being able to find Naruto, he planned and attacked Takigakure as he knew that the village was not strong enough to face Naruto after what happened with him. After attacking Takigakure, Danzo took that village under his control and captured the Jinchuriki of the seven tails named Fuu. After capturing her, Danzo transferred the tailed beast into Sai. One of his trusted emotionless subordinate. After this was done, Danzo started improving military strength of the village. He attacked the nearby civilian villages and captured the children with above average chakra levels and forced them to become leaf Shinobi.
He also changed the style of the academy to make strong Shinobi faster. This caused major clans and other civilians started to show discomfort, but Danzo didn't care. All he wanted was to build a military nation, unify the Shinobi world and rule it. So he did all he can to achieve his goal. The root was the strongest organisation in the village. So Danzo expanded the root to new levels by implanting every Shinobi that had potential inside root. Thus Danzo became more powerful inside the village and nobody could oppose him because he had the strongest army of emotionless suicide squad under him.
Thus the leaf village took a turn for the worse. Many people started leaving the village. This includes some clans as well. But Danzo didn't care and also named the Shinobi clan members who escaped as rogue Shinobi. Naruto summoned Minato from the dead once again and showed him the condition of the leaf village and mocked him "You see father, you sacrificed yourself, your wife and your son for this stupid village. What do you think now?" Minato lowered his head and finally accepted that he sacrificed his life in vain. Naruto then placed a new developed seal on his soul making it impossible for anyone except him to summon Minato from the dead as Orochimaru had summoned him back then. Minato also thanked Naruto for this.