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Jerry,
I can't answer your question about the firmware. But deleting the book is easy. Just connect the Kindle to your PC or Mac, go to the Documents folder, and delete all the files in the usual way.
Whether or not that will remove all traces of your book probably doesn't really matter. I strongly suspect that, given the screen is defective, Amazon will just throw the Kindle on the junk pile. Or, at best, remove the salvagable components for recycling. I seriously doubt they will try to resurrect the device to sell to someone else, who will then hack it to find any remaining remnants of your book.
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