I did a hard reset. I was worried at first that it may 'brick' the reader (because of the very stern warning that I shouldn't be playing with the on/off button), but it didn't. Fortunately it rebooted and went back to v5.0.3.
I cleared out the ebooks in the storage and tried again, and the update went through without a glitch this time. I didn't think 200 odd ebooks could cause a problem!
Anyway, functionally, v5.0.4 seems to be the same as v5.0.3. The only difference is the version number.