@coplate: Yeah, a TC build takes roughly 30 min on my buildbox (vs. much, much less on my desktop).
And yeah, you probably need a more-or-less complete build envrionment (with static libraries, which might still be an issue for Arch users).
Gentoo here, so, that usually completely skips my mind

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You can take a look at kindletool help for the full details, but basically you should be good with
$ kindletool create ota2 -d kindle5 <input> <output>
Or a more fine-grained set of devices, since with that TC binaries won't run on devices earlier than the PW2.
As for whatever you feed to it as input, it behaves like tar by default. Scripts (.sh/.ffs) get flagged as update scripts, and are run in alphabetical order by the updater (no matter where they are, although I don't recall anyone ever trying putting them somewhere else than top level).
On those devices, the updater always cleans up after itself, so you don't really have to care about that in your install script. (It extracts the package in a temp directory that gets wiped on exit).
I have a set of helper stuff for logging & progress handling in update scripts (libotautils5). It's bundled with basically any of my stuff. While I used to recommend the dummy package as an example, basically any of 'em will do

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