First off, your PDF books. If they are free books, I would go back to the site you got them from and see if they have epub versions. You might also try some of the other sites with free epubs for their versions.
I personally like the epubs I have downloaded from
http://www.feedbooks.com. I go there first and if they don't have it, then I check elsewhere.
As far as editing covers, there is NO simple solution as yet.
If you use Calibre and add a new cover there, you have two choices for updating the cover to the Kobo.
1. use the "convert books" button to have Calibre convert from epub to epub.
This has its own problems. Mainly that Calibre creates a cover that no longer has the correct aspect ratio. ie. the cover is stretched or squashed.
It also, in my experience creates an epub where you can NOT change the margins.
2. This is much more involved. You use the "tweak epub" selection on the right click menu and explode the epub. You can then edit the "cover.jpg" image and save the corrected image back into the epub. Yes, it is very involved but gives you much more control over things.
3. There is some software written by another forum user (Nigol), that may help. I have not tried it out yet.
ePubFixer -
http://code.google.com/p/epubfixer/
You could also check out some of the threads about the cover issues with the Touch for some more ideas.
Hope this helps a little.
Larry