It's been a long time since I use 1.9.17 on my Touch, but from memory, it didn't have a signout option. That was added a lot later. Once you connect to the PC, there is nothing you can do on the device, all interaction with it is from the computer. And while the desktop application has a signout option, I don't think affect the device when it is connected.
For the compress, I'm surprised there was an error if the check didn't find a problem. What was the error message?
But, the problem you are seeing is probably a problem with a book. If the device doesn't like a book for some reason, the processing stops. And no books are added to the library. And the next time the processing happens, that same book will stop the processing again. Unfortunately, there are no errors displayed and no easy way to work out which book it is.
To get around this, you need to remove the books that are not in the library on the device. Then, add them in smaller batches or one at a time. When you find the book that doesn't work, you remove it and go on to the next.
Fixing the book might be as simple as a epub-to-epub conversion in calibre, or opening in the editor and checking for errors.
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