A factory reset puts the device back in to the from factory state. If formats the root partition that the firmware is installed into, installs the factory firmware from the recovery partition and formats the data partition. Then it prompts for setup.
At this point, I would expect a Touch to be on either 1.9.11 or 1.9.12. I would have said 1.9.6 was a pre-Touch firmware and used by the WiFi. Are you sure you weren't on 1.9.16? From memory, my N905 Touch restores to 1.9.11.
If you don't want the latest firmware after the factory reset, you need to connect to a PC to do the setup. The Kobo desktop app will download the latest firmware files and put them on the device. You delete these if you want to stay on the factory reset firmware, or replace them with the files for the version you want to use.
Direct Links to Kobo Firmware has the download links for a lot of different version.
There is no official way to reset the reading statistics. Deleting all the rows from the Event table in the database on the device will do it.
I probably should add that if you are serious about going back, you can do this by taking a copy of all files on the data partition of the device. After you do the factory reset, you restore all these files plus the files for the firmware you want to install.