1) Kobo supports both EPUB and KEPUB. If you download them from Kobo directly you're more likely to get KEPUBs.
2) There are not nested shelves but nothing stopping you to do prefixes, so you can have a Fiction/Europe/England/ shelf and a Fiction/Europe/France shelf if you so desire. It's not nesting but a flat-view of a nested structure so to speak.
3) It's possible to have same book in multiple shelves.
4) The sorting options are kind of broken in the firmware, several of them just do not work the way they're supposed to
no device is perfect
Of course that's not considering alternative reading software [koreader, coolreader] you can install which comes with its own ways of organizing books.