I use a somewhat similar method, but I have an ancient copy of Dreamweaver, the wysiwyg web page editor, so what I do is this:
Scan pages, save as RTF
(Usually ten or so pages at a time to prevent screaming boredom)
Start a new book RTF file and copy the pages onto it in turn, correct scan errors, fix up format. When I have entire book scanned and all pages loaded into the book RTF file, I go through, check and proof read and generally make presentable layout, with TOC etc. and with a 500 x 800 cover pasted at the top.
Then save as web page, filtered (ex MS Word). Reason is MS's own unfiltered version of a web page has a whole lot of junk which causes my Dreamweaver to have hysterics.
Now I open Dreamweaver, pick up the RTF book file, and in Dreamweaver I add the TOC links and add the cover, a 500 x 800 jpeg image, at the very top. (For some odd reason, when you convert an RTF to Web Page in Word, it reduces the size of any image and makes it into a GIF, which is bad news. So I replace the small GIF with another full-size copy of the jpeg cover.
Once I'm happy all is clean, I then go to Calibre, and "add book", picking up the web page version of the file.
Then I edit metadata, save, and then convert into Mobi or epub.
Laborious. but I have done at least 20 books that way so far. For an example, see "The Green Hat, by Michael Arlen, in the Mobi section of the Library. Or an Edgar Wallace such as "Kate, Plus Ten". Or poetry--archie and mehitabel (lower case please) by don marquis. All done the hard way.
I only make mobi, because I have a kindle, which reads mobi. If I had another reader which used epub, I'd convert to that.
If any of your books are out of copyright, you can sometimes find a pdf or rough scan somewhere on the net, which simply needs cleaning up.
There are faster ways, but they require special equipment. An industrial strength scanner/OCR where you dismantle book to its individual pages and it autmatically feeds them through like a photocopier, scanning both sides and stitching the text automatically. Another method uses two cameras at right angles and a frame which supports a book open at 90 degrees, with the cameras photographing the pages, and the inevitable software to stitch it all together.
If you are going to do 500 books, all I can say is: better you than me!
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