About your "inadvertent" factory resets. One of the steps in doing a factory reset using the buttons is to "hold the home button down while turning the device on". So, with what you are doing, I'm not surprised you are having factory resets happen.
From your reports, I can't tell what is really happening. It this the Touch is freezing while you are reading and you are randomly pressing buttons until something happens. While that gets you going again, it doesn't help work out what the problems is and how to fix it. When you get a hang on a Touch, there are only a limited number of things you can do:
- Wait. Maybe it hasn't really hung, but got really busy for some reason. But, waiting more than five minutes isn't reasonable. I have waited a lot longer and had it come back, but I'm not normally that patient.
- Push the slider to put the device to sleep, wait 30 seconds and wake it up. There's a freeze related to selecting text that this solves. Bad timing when swiping can trigger this.
- Push the reset button. This should restart the device. It won't do anything if the device is powered off.
- Hold the power switch in the off position for 20 to force a power off. Then turn it on again.
- Plug it in and charge it. This can trigger a reaction. And if the hang is a runaway process that consumed the battery, it will start the device after a few minutes of charge.
- Do a factory reset using the buttons.
Of those, 3, 4 and 5 can result in data loss. Depending on what was happening, these might mean the latest state of the book wasn't stored in the database. That usually means the book reopens to the last place you opened it to, rather than where you were up to.
Losing the status is also a sign of a corrupt database on the device. The corrupt database means the device cannot save any status changes to the database but using it seems OK. When you restart the device, it can only read the old version of the database, and reopening a book goes to an earlier location. The factory reset will fix this as it generates a new database. But, if there is some other issue causing the database to be corrupted (hardware, not safely ejecting the device, pressing the reset button rather than powering of properly) then this could happen again. And a wonky USB cable could cause some problems such as disconnects when you bump the cable.
If it is a hardware problem with the device, at four years old, Kobo won't be interested. The only replaceable part in the device is the internal micro SD card. If this is failing, it could explain the problems. You can open the device, and replace the card. The new card has to be prepared by writing an image for the Touch to it, but that is not to hard and the image is available.