Only the first version of the Touch didn't have an internal SD card. Your model number looks like one of them. The N905B and N905C both have the cards. The N905C started coming out last year. Hopefully any you find in a shop now will be an N905C.
If you can stretch the budget, you should consider a Glo. The CPU is a bit faster and the higher resolution screen makes the screen a lot clearer. And the light is very handy. Alternatively, have a look at the other reader apps that are available. You might find they work better for you and should run on your current Touch.
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