@tshering - Funny, I just came across this page:
http://uscoffings.net/clc/tech/embedded/kobo-touch/
For anyone else looking for a solution, all I had to do was download an SQLite3 editor for my mac, then open that KoboReader.sqlite on the FAT partition (on the internal microSD) and execute one line of code. Now my Kobo can connect to my wifi network and it automatically updated. I can finally use this device the way I want to, screw their proprietary activation software, nothing but a pain!
Thanks so much for your help everyone!! Can't wait to finally start reading!
-eeprom