Smallest SD card I can easily find for my Kobo touch is 4 gig. It is SanDisk brand, works good and is much bigger capacity than I can imagine filling epub books. I had more than 2,000 books on it and it worked ok. Lots of short stories. Only problems I have experienced is books with some kind of bad formatting that Kobo couldn't handle and unplugging Kobo from computer before it was safe. I have loaded from one to hundreds books at once. When a bad book keeps kobo from working you will wish fewer books were just loaded. You can drag and drop books onto SD card, use Calibre to load books, use Adobe Digital Editions (ADE) to load books or use Kobo desktop program to load books. Only use one of those methods to load books than safely disconnect Kobo from computer and let Kobo update books in library before loading more books with a different method.
I use Calibre to manage my side loaded books. It works well and keeps getting better with each new version.
When I have really corrupted a SD card I use SD Formatter to reformat the SD card. Use that program in full over write mode is only setting that has worked for me. Before formatting give the card a name easy to recognise it's use so the formatter will write the name in cards memory and you then write that name on the outside of SD card.
https://www.sdcard.org/downloads/formatter_3/