I can solve one of your dilemma's: Kobo dictionary DOES work on sideloaded e-pubs. This was added a few firmware updates ago. I don't have experience with the Kindle dictionary, but from what I've read it may have a slightly better actual dictionary in it. I've never used a cover on my Kobo's (even though some people say it's a must), so go with whatever you feel better with.
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