The textbooks can be read on the edge IF they don't need a special program to open them and if they are in PDF or EPUB format. Most textbook companies use SPDF format and their own software.
In a roundabout way journal notes are searchable, you have to save as PDF (they save as PDF images), send to your PC, save, paste into Word and send that document to Evernote - which searches and OCR's.
http://www.evernote.com/ There is an Evernote app for android, so you will have easy access.
As far as know eink in itself does not need upgrades but the reader/journal app will get updates from Entourage and the company has promised an OS upgrade to Android eventually.
As far as the library PDF's you can OCR them on your computer with software(although most of it is fairly expensive and not perfect) and yes you can change or erase your highlights and notes at will. The Android version of Adobe reader requires Android 2.1 or higher, it cannot be used on the edge yet. The reader/journal reads PDF files and has search capabilities.
I must add, as a student my edge is indispensable and the most useful purchase I have ever made. I rarely take anything else to class anymore and do a lot of my class and homework on it,m then email to the teacher.