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Kimberly, I own one of the eBay Auras you linked to and I'm very happy with it.
You'll have to convert your MOBI to ePub to read on the Kobo. Calibre is very good about that. (You can actually get a plug in for Calibre that will convert your books when it sends them to the device so you don't need to convert anything.)
As for borrowing from the library, as far as I know, Kobo doesn't work for that in the US, though Kindle does. I don't borrow books from the library though, so seek advice from other folks.
I like the light. I tend to keep my light very low (like 10-15%) and when I read in the dark, I notice a little splotching/dark areas near the bottom of the screen. But as far as I know, that would happen with any e-reader set super low like that. It doesn't impact my reading in any way.
For $50.00, I'd happily buy another. They are the best deal going, unless my library news is a deal breaker.
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