[GeoffR]

In your Calibre conversion settings make sure you have Page Setup > Output Profile set to Tablet. Don't use the Kobo Reader profile, that is only for old low-resolution Kobo devices, and will make the covers too small on newer devices.

But beware, if you have already converted books using the wrong profile then Calibre might keep using that same profile the next time you convert, it will only use the new profile for new conversions, so for those books you might need to manually change the output profile when you re-do the conversion.

Note that the above applies to the cover inside the book. Normally the device will use that cover to generate the thumbnail images. For better results with cover thumbnails you might also try enabling the "Upload covers" option in the KoboTouch driver. This causes Calibre to send the cover image to the device directly and so avoids the whitespace caused by the book's page margins.

Edit: Also beware that when you change the covers, you might need to turn the device off and restart it before the new covers will show up.