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Yes,
The Kobo has a built in dictionary. No you do not need wifi to access the dictionary on either Kindle or Kobo.
Now for highlights to sync across devices, yes you need wifi and you need to buy from the specific store or have them stored in the cloud at Amazon for a Kindle. Kobo doesn't have that feature.
The common book format for Kobo is epub.
The common book format for Kindle is Mobi.
The problem with pdfs on an ereader is pdfs are fixed fonts (texts) whereas epub and mobi are reflowable text.
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