The answer is yes to both.

In order to write annotations on the PDFs/EPUBs, however, you need to Add to the Library on the files. This will make a *copy* of each to a protected area in the eDGes internal storage. The Library doesn't respect folder organization, only tags.

if you don't need to write annotations, only read them, or maybe just highlight sections, then you can open them right off the SD card.