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The Kindle is a good choice, because as you say reading is the primary thing and its page turn keys on both sides work well. I find its d-pad to be much too small and too near the other keys, which makes non-reading tasks sub-optimal - but bearable.
For large ebook libraries, I think a user-visible folder structure is best. On the kindle, you can use a folder hierarchy for ebooks but they always show up as a linear list. However, there are collections - which are in some ways more powerful than folders. For large ebook libraries (or even small ones), use Calibre to manage all your ebooks. It can setup Kindle collections for you based on your criteria (tags or whatever).
The Kindle has the most comprehensive searching capability of any ebook reader. You can globally search all the text in all your ebooks, and you can also go directly to a first letter in title or author display modes. Within an ebook there is a built in dictionary, although the D-pad makes it less easy to select a word than a touch screen (e.g. on a Sony) would.
The current, mostly unfounded, rumor is that there will be two new 6" Kindles this fall. One like the current one but cheaper, and one with a touch screen. Rumors about either or both might be correct, and even if they exist within Amazon they might decide against releasing one or the other. A touch screen Kindle probably would be an advance over the current d-pad, but so would a better designed d-pad.
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