Kobo generates the cover images from the first page of the book. So, whatever that looks like will be what it uses. And they will be generated with the current reading settings you are used. This means if you have wide margins, there will be a lot space on either side of the actual cover.
If you update the metadata to have a new cover, this should be put into the book when it is sent to the device. Calibre updates the book as it is sent with the metadata from the library, When it updates the cover, it needs to be able to identify the current cover. This isn't always possible, so the existing cover doesn't get replaced. If you have a case like that, you can get the cover replaced using the Polish Books function or a conversion.
If this still doesn't work, you can send the covers separately when sending the books. The driver for Kobo devices has options to do this. In the driver configuration, the options are "Upload covers for books", "Keep cover aspect ratio" and "Upload Black and White covers".
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